German trade surplus narrows as demand for imports on the rise
Germany's trade surplus narrowed in October on a jump in demand for imports from firms and households, while industrial output unexpectedly fell, signalling a mixed start to the fourth quarter for Europe's biggest economy.
Factory production dropped for the second month running, though the economic ministry said that forward-looking sentiment data and robust construction orders indicated production would rise in the next months.
The 1.7pc month-on-month decline in output followed disappointing data last Friday that showed industrial orders posting their biggest fall in nearly a year in October.
Trade data gave more cause for cheer, both for Germany and its eurozone peers. Imports rose 2.9pc on the month and exports rose 0.2pc, to give a surplus of €16.8bn -- smaller than the consensus forecast for €18bn.
"With a narrowing trade surplus and dropping industrial production, the German economy did not have the overwhelming start to the fourth quarter confidence indicators had suggested. Still, in our view, the economy should pick up speed again, ending the year on a positive note," said economist Carsten Brzeski at ING.
Germany has come under fire for relying too heavily on foreign trade and running high trade and current account surpluses at a time when the eurozone economy needs support.
Criticism also came from Washington that Berlin must do more to spur domestic demand, and that its reliance on exports was hurting the global economy. (Reuters)