European exports fell in October, led by declines in Germany and Spain, as the region’s economy edged toward a recession.
Exports from the euro region dropped a seasonally adjusted 1.9 percent from September, when they fell 1.1 percent, the European Union’s statistics office in Luxembourg said today. Imports fell 0.7 percent, and the trade surplus shrank to 300 million euros ($391 million) from 2.2 billion euros a month earlier. Labor costs grew 2.7 percent in the third quarter, a separate report showed.
Europe’s economy is showing signs of weakening in the current quarter, as the euro area’s debt crisis spreads from periphery nations to core countries and global demand falters. The European Central Bank cut its benchmark interest rate last week for the second straight month and lowered its forecast for growth next year to 0.3 percent from 1.3 percent. ECB President Mario Draghi said Europe faces “a mild recession by year-end.”
The euro region’s economy may contract 0.6 percent in the fourth quarter, Chris Williamson, chief economist at London- based Markit Economics, said yesterday. Rising exports in the third quarter helped to offset the impact of a slump in construction and maintain growth of 0.2 percent.
The euro was little changed after the data were released, trading at $1.3037 at 11:12 a.m. in Brussels, up 0.2 percent.
Exports from Germany, Europe’s biggest economy, decreased a seasonally adjusted 1.7 percent in October, today’s report showed, while shipments from France dropped 0.4 percent. Spanish exports plunged 9.1 percent in the month. Belgian shipments soared 10.7 percent.
Ripples from Europe’s debt turmoil have dented confidence among companies and consumers and hit global demand. The Organization for Economic Cooperation and Development said last month that trade in goods stalled in most major economies in the third quarter and it cut its growth forecast.
Euro-area nominal labor costs, which include wages and salaries, grew a working-day adjusted 2.7 percent in the third quarter after a 3.3 percent increase in the previous quarter.
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