German July Exports Decline as Global Recovery Slows
German July Exports Decline as Global Recovery Slows
Michele Tantussi/Bloomberg
German factory orders unexpectedly fell in July and manufacturing activity eased in August as the economy slows after expanding at the fastest pace in two decades in the second quarter.
German factory orders unexpectedly fell in July and manufacturing activity eased in August as the economy slows after expanding at the fastest pace in two decades in the second quarter. Photographer: Michele Tantussi/Bloomberg
German exports fell in July for the first time in three months, adding to evidence that Europe’s largest economy may lose momentum as the global economy cools.
Sales abroad, adjusted for working days and seasonal changes, declined 1.5 percent from June, when they increased a revised 3.7 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast exports to remain unchanged, the median of 15 estimates in a Bloomberg News survey shows. Imports dropped 2.2 percent from June, when they increased 1.6 percent.
German factory orders unexpectedly fell in July and manufacturing activity eased in August as the economy slows after expanding at the fastest pace in two decades in the second quarter. Recent economic data also point to slower growth in the U.S. and Chinese economies, which may curb demand for German exports.
“After the strong surge in the second quarter, German exports are now normalizing,” said Carsten Brzeski, senior economist at ING Group in Brussels. “However, normalizing does not mean stagnation. Even at a slower pace, the export sector should remain an important growth driver.”
The euro, which has dropped 11 percent against the dollar this year, was little changed after the export report. The currency traded at $1.2722 at 8:44 a.m. in Frankfurt from $1.2682 yesterday.
Moderate Growth
European Central Bank President Jean-Claude Trichet said last week that surveys “confirm the expectation of a moderation” in the second half of this year, both globally and in the 16-nation euro region.
German exports rose 18.7 percent in July from a year earlier, today’s report showed. Exports to countries outside the European Union increased 25.1 percent and sales to countries within the euro region rose 15.1 percent.
Some companies are nevertheless seeing little weakness. Schaeffler Group, the world’s second-biggest roller-bearing maker, on Sept. 1 reported a second-quarter profit as record car sales in China and a resurgent U.S. market spurred demand for auto parts. SAP AG, the world’s largest maker of business management software, aims to make China “a second home” as local companies seeking management tools and real-time business intelligence will provide “limitless growth,” co-Chief Executive Officer Bill McDermott said.
German economic growth could slow by more than half next year as fellow euro-region countries continue to struggle with the debt crisis, the BGA wholesale and export federation said yesterday. “Even though we’re doing better than our neighbors, we’re only cautiously optimistic looking into the fourth quarter and next year,” BGA head Anton Boerner said.
To contact the reporter on this story: Christian Vits in Frankfurt at cvits@bloomberg.net
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