German Exports Unexpectedly Fell in January After Two Increases
German exports unexpectedly declined in January after gaining in the previous two months.
Exports, adjusted for work days and seasonal changes, dropped 1 percent from December, when they rose 0.5 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast a 0.7 percent increase, according to the median of 13 estimates in a Bloomberg News survey. Imports gained 2.3 percent from December, when they declined 2.6 percent.
Germany’s economic recovery is broadening as companies increase investment and hire more workers to meet export demand, encouraging household spending. A focus on emerging markets is helping to boost foreign sales as governments across the euro area cut spending to rein in deficits. Volkswagen AG (VOW), Europe’s biggest automaker, surpassed rival Ford Motor Co. in profit last year on surging demand in fast-growing economies such as China.
“There is no reason at the moment why Germany’s export dynamic should slow down,” said Ulrike Rondorf, an economist at Commmerzbank AG in Frankfurt. “Exports will be a central economic pillar again this year.”
Still, the Bundesbank expects economic growth to slow to 2.5 percent in 2011 from a record 3.6 percent in 2010 as the pace of the global recovery eases. World output will weaken to 4.4 percent this year from 5 percent last year, the International Monetary Fund forecast on Jan. 25.
From a year earlier, German exports rose 24.2 percent in January, today’s report showed. Sales to countries within the euro region advanced 18.8 percent in the year while sales to countries outside the European Union increased 30.8 percent.
The trade balance narrowed to 10.1 billion euros ($14 billion) from 12.2 billion euros in December. The surplus in the current account, a measure of all trade including services, was 7.2 billion euros in January, down from 19.3 billion euros in December.
German business confidence jumped to a record high last month and unemployment dropped to 7.3 percent, the lowest in almost two decades. Industrial production rose in January after construction output rebounded from its winter hiatus, and manufacturing orders rose more than economists forecast on domestic demand, the Economy Ministry said this week.
BASF SE (BAS), the world’s biggest chemical company, said on Feb. 24 that fourth-quarter profit more than doubled as demand from the automotive industry grew, prompting the company to propose a bigger-than-expected dividend. Volkswagen’s Audi unit plans to spend 11.6 billion euros worldwide on new plant, products and technologies in the next five years.
“Our factories are buzzing,” Chief Executive Officer Rupert Stadler said on March 8. “2011 will mark another year with great workload for us.”
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