Activity in the three months to December was shy of analyst forecasts for 0.5 percent as compiled by Dow Jones Newswires.
Cold weather and snow in December curtailed construction activity and economists said it would probably bounce back like it did last year.
“The construction sector should rebound forcefully in January,” Goldman Sachs economist Dirk Schumacher said.
For all of 2010, the Destatis office confirmed the economic expansion of 3.6 percent initially estimated in January, marking the strongest growth since German reunification in 1990.
In the last three months of the year, activity expanded by a price-adjusted 4.0 percent from the same period in 2009, it added, slightly less than analyst forecasts for 4.1 percent.
“The upswing of the German economy continued at the end of 2010, though at a slightly slower pace,” Destatis said in a statement.
The economy grew 2.2 percent in the second quarter, slowing to 0.7 percent in the third.
“We think that the absolute boom in German industry is behind us,” UniCredit economist Andreas Rees said.
Once again in the fourth quarter, “a positive contribution was made mainly by net exports,” Destatis said.
“Also, on a domestic scale, both capital formation in machinery and equipment and consumption were up, so that especially the weather-related decrease in capital formation in construction could be offset.”
Detailed results are to be released on February 24.
German Economy Minister Rainer Brüderle said in a statement that “these results show that the upward trend of the German economy is continuing,” and the government still expects growth of 2.3 percent this year.
Brüderle said Germany remained an economic locomotive but some eurozone partners complain that its exports come at their expense.
The value of German exports soared 18.5 percent last year, Destatis figures show, though imports grew by an even faster 20 percent.
ING senior economist Carsten Brzeski said the growth data “showed that the economy has lost somewhat more steam than expected.
“The economic high-flyer of the summer has been brought back down to earth,” he noted. “However, it is not a crash-landing but only a snow-driven stop-over.”