German exports dropped more than economists forecast in June as the sovereign debt crisis curbed demand from euro-area trading partners.
Exports, adjusted for work days and seasonal changes, fell 1.5 percent from May, when they jumped 4.2 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 1.3 percent decline, according to the median of 15 estimates in a Bloomberg News survey. Imports fell 3 percent from May.
Europe’s largest economy is cooling as the debt crisis drives the euro area, its biggest export market, toward recession. While the Bundesbank last month estimated moderate growth in the second quarter, aided by domestic spending, latest reports show manufacturing is contracting and business confidence is on the decline. Factory orders dropped 1.7 percent in June from the previous month, the Economy Ministry said yesterday, twice as much as economists forecast.
“All of Germany’s export markets are in reverse,” said Christian Schulz an economist at Berenberg Bank in London. “It’s the domestic economy that will need to pick up the slack.”
Germany’s trade surplus widened to 17.9 billion euros ($22.2 billion) in June from 15.6 billion euros in the previous month, today’s report showed. The surplus in the current account, a measure of all trade including services, was 16.5 billion euros, up from 8.1 billion euros a month earlier.
Rising wages and unemployment at a two-decade low are supporting domestic spending, helping to offset waning export demand. The Bundesbank in June predicted German growth of 1 percent this year. By contrast, the European Commission forecasts a 0.3 percent contraction for the 17-nation euro economy as a whole.
Germany’s Adidas AG (ADS), the world’s second-biggest sporting- goods maker, on Aug. 2 reported second-quarter profit that topped analysts’ estimates and raised its full-year forecast as revenue increased in China, North America and European emerging markets.
Still, Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, on Aug. 1 reported its first drop in quarterly operating profit in almost three years and warned that Europe’s debt crisis could cause “the global economic climate to cloud over further.”
German business confidence fell for a third straight month in July. Industrial production probably declined 0.8 percent in June from May, according to a Bloomberg survey. The Economy Ministry in Berlin will publish that report at noon today.
“Surveys indicate that German companies assess their business situation much more pessimistically than in the spring, making bearish data from manufacturing quite likely in the third quarter too,” said Ulrike Rondorf, an economist at Commerzbank AG in Frankfurt. “The crisis in the euro zone is having an increasing impact on core countries of the monetary union.”
To contact the reporter on this story: Gabi Thesing in London at email@example.com
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org