German exports fell for a second month in August as euro rose
Published 08/10/2010 | 09:00
Exports from Germany, Europe’s largest economy, declined for a second month in August as a strengthening euro and slowing global growth curbed demand.
Sales abroad, adjusted for working days and seasonal changes, slipped 0.4pc from July, when they fell 1.6pc , the Federal Statistics Office in Wiesbaden said today.
Economists had forecast a 0.3pc drop, according to a Bloomberg News survey. Imports rose 0.9pc from July, when they fell 2.2pc.
Germany’s economy may weaken after surging exports helped growth accelerate to the fastest pace in two decades in the second quarter.
While factory orders and industrial output jumped more than economists forecast in August, the euro’s 17pc ascent against the dollar in past four months is making goods less competitive abroad just as governments across the euro region, Germany’s biggest export market, cut spending.
“Industrial output should continue to rise at a considerable rate over the coming months,” said Simon Junker, an economist at Commerzbank in Frankfurt.
“Still, manufacturing won’t quite reach the pace of spring anymore. That’s because of cooling global trade.”
German exports rose 26.8pc in August from a year earlier, today’s report showed.
Exports to countries within the euro zone increased 16.5pc in the year while sales to countries outside the European Union rose 40.8pc.
A stronger euro is threatening to hurt sales outside the euro area just as the global recovery weakens.
In the US, the world’s largest economy, manufacturing growth eased last month. Europe’s services and manufacturing industries expanded at the slowest pace in seven months in September.
The International Monetary Fund said on October 6 that it expects the world economy to expand 4.2pc next year instead of a previously projected 4.3pc.
In 2010, the economy may grow 4.8pc, the Washington-based fund said.
With governments across the euro region cutting spending and raising taxes to push down budget deficits, German companies may be forced to rely on faster-growing markets in Asia to boost sales.
The IMF said earlier this week that China will help provide a “partial offset to the weaker demand from advanced economies.”
Bayerische Motoren Werke AG, the world’s largest maker of luxury vehicles, said on October 1 that deliveries in the third quarter beat its forecasts, with September capping a “very good” three-month period.
Porsche, the maker of the 911 sports car, said on September 29 that full-year revenue jumped 18pc and forecast that the “positive trend” would continue.
“Order books are still filling,” said Carsten Brzeski, an economist at ING in Brussels. “A substantial part of the second-quarter momentum has been carried over into the second half of the year. The German economy is heading toward its best growth year since reunification.”
The Bundesbank forecasts German economic expansion of 3pc in 2010.