FOR DECADES Germany has been Europe’s economic engine. Now it is sputtering. Having narrowly avoided a recession last year, it is teetering on the brink once again. Output fell by 0.1% in the second quarter compared with the previous three months. Some forecasters, such as DIW, an economic think-tank in Berlin, expect a further contraction in the third quarter. Deutsche Bank, the country’s biggest lender, said this month that it believes the economy is already in recession.

The trouble has been concentrated in Germany’s export-oriented manufacturing sector, which has shrunk for four consecutive quarters. Car production has taken the biggest hit, falling by 17% over the past year, owing in part to slowing demand from big trading partners, such as China and Britain, and a shift in consumer tastes away from German diesel motors. All this, and an escalation in the trade war between America and China, has battered business confidence. On August 26th the Ifo business-climate index fell to its lowest level since the worst of the euro-zone debt crisis in 2012. The labour market has not escaped unscathed. A growing number of manufacturers are seeking to cut costs by putting employees on “short-time work” schemes.

What would a recession in its largest member state mean for the rest of the euro zone? In the past two decades of currency union, recessions have tended to be synchronised (see chart). Work by the IMF suggests that such synchronisation has only increased in recent years. Indeed, economic growth across the rest of the euro zone has slowed recently, albeit less sharply than in Germany. But it is not certain that Germany’s manufacturing woes will ultimately tip the bloc into recession. The euro area’s biggest downturns, during the global financial crisis and the sovereign-debt crisis, were triggered by shocks—such as a seizure in the market for credit—that affected all of its members. Not all of the euro zone is as exposed to trade as Germany.

For now the European Central Bank is unlikely to take any chances. Inflation is already well below its target; slowing growth adds downward pressure. Financial markets are pricing in an interest-rate cut at the bank’s policy meeting on September 12th. Some economists are even expecting the bank to restart its bond-buying scheme, in the hope of jump-starting the economy.