European April Exports Rose on China, Defying Strong Euro
European exports rose in April on greater demand from the U.S. and China, shrugging off the effects of a stronger euro.
Exports from the economy of the 17 nations that use the euro rose a seasonally adjusted 0.6 percent from March, when they increased by the same amount, the European Union’s statistics office in Luxembourg said today. Euro-region construction output rose 0.7 percent from the previous month, when it declined 0.1 percent, a separate report showed.
The European Central Bank revised up its growth forecast for this year on June 9, predicting expansion of 1.9 percent after a previous estimate of 1.7 percent on “the ongoing expansion in the world economy.” Even so, the recovery may struggle to maintain momentum as the 15 percent appreciation of the euro against the dollar makes goods manufactured in the euro region more expensive and higher oil prices boost companies’ input prices.
“Exports are particularly driven by Germany, which doesn’t compete solely on price but on highly specialized products,” said Carsten Brzeski, an economist at ING Group in Brussels. “At the same time, the stronger euro will start to bite in the coming months, damping growth, even though it won’t slide back into recession.”
The euro was little changed after the data were released, trading at $1.4168 at 11:03 a.m. in Brussels, down 0.3 percent.
‘Strong Global Demand’
The German economy, the main driver of the European economy, will expand at the fastest pace since the country’s reunification as domestic demand picks up, the RWI economic institute said yesterday.
German carmakers are hiring because of booming demand in China for high-end vehicles. Bayerische Motoren Werke AG Chief Executive Officer Norbert Reithofer said on May 12 that the Munich-based company will hire about 2,000 workers over the course of the year, more than half of them in Germany, “in light of strong global demand for BMW, Mini and Rolls-Royce brand vehicles.”
Euro-area imports rose a seasonally adjusted 1.1 percent in April and the trade deficit widened to 2.9 billion euros ($4.1 billion) from 2.2 billion euros in the previous month, today’s report showed.
Euro-area exports to the U.S. rose 20 percent in the year through March from the year-earlier period, while shipments to the U.K., the euro area’s largest market, increased 14 percent. Exports to China surged 31 percent.
China’s Customs General Administration reported on June 10 that imports from the European Union rose 28.5 percent in April.
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