Figures showing a 7% rise in June exports fueled optimism that Europe's largest economy is on the mend, but some remain cautious
With figures released Friday (7 August) showing that Germany enjoyed a 7 percent jump in exports in June, Germans are hoping that the end to its deepest postwar recession might be coming into view.
Germany's Federal Statistical Office announced the figures in its preliminary report for the month, noting that it was the biggest rise in exports since September 2006, when the figure was 7.3 percent. Experts had only anticipated a 1.1 percent rise after the figures were seasonally adjusted. The figure in May was a mere 0.2 percent gain.
Some see this as just the first bit of good news for Europe's largest—and predominantly export-driven—economy. Andreas Rees, for example, an economist at Unicredit (CRDI.MI) in Munich, told the Financial Times that it marked a "tremendous comeback" and that "definitely more is in the pipeline in the months to come."
'A Further Sign of Stabilization'
Others are more tempered in their optimism. "This is a further sign of stabilization," Deutsche Bank (DB) analyst Stefan Bielmeier told Reuters. "But we are still a long way from a self-supporting recovery."
But optimists are hoping that global economic growth will soon return to its pre-crisis levels. They point out that the most important economic early indicators are currently climbing around the world. In the US, the purchasing managers index has climbed in recent weeks back to levels not seen since before the bankruptcy of investment bank Lehman Brothers. In China, companies have been opening their pocketbooks for investments again for the past three months. And Europe appears to have emerged from the worst, too. According to the latest poll data from economic research institute Ifo, export expectations in the German auto industry have almost returned to pre-crisis levels.
Still Plenty of Room for Catchup
The agency announced that Germany's total exports for June amounted to €68.5 billion ($98.6 billion), which is down 22.3 percent from the same period last year—meaning that Germany still has a lot of catching up to do. The Federation of German Wholesale and Foreign Trade (BGA) is forecasting an 18 percent slump in export sales for 2009, the first contraction since 1993 and the largest in postwar history. For 2010, BGA president Anton Börner is anticipating a return to growth of 5 or 10 percent.
Imports to Germany were also up slightly in June, climbing by 6.8 percent compared to the previous month. In total, goods valued at €56.3 billlion euros were imported—17.2 percent less than the same period in 2008.
On Thursday, Germany's Economics Ministry announced that industrial orders in the country had risen 4.5 percent in June, marking a continuing trend over May, when orders saw a 4.4 percent rise.
Next week, the country will release data on what is expected to be a modest contraction of the economy for the second quarter, following a first quarter which saw negative GDP growth of 3.8 percent.
jtw—with wire reports