German Exports Fell in February Amid Euro-Area RecessionJeff Black
German exports fell more than economists forecast in February as the euro area, the country’s biggest trading partner, struggled to emerge from recession.
Exports, adjusted for working days and seasonal changes, dropped 1.5 percent from January, when they gained 1.3 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 0.3 percent decline, according to the median of 15 estimates in a Bloomberg News survey. Imports fell 3.8 percent.
Germany’s economy, Europe’s largest, probably returned to growth in the first quarter after contracting 0.6 percent in the final three months of last year. Still, renewed financial-market turmoil after inconclusive elections in Italy and a bailout in Cyprus may delay a recovery in the 17-nation euro area.
“The export-driven manufacturing sector, which accounts for roughly a quarter of German gross domestic product, has not fully turned around yet,” said Christian Schulz, senior European economist at Berenberg Bank in London. “While much of the euro zone remains in serious recession, Germany will have to rely on domestic demand and exports to stronger economies such as China and the U.S. for a growth rebound.”
The trade surplus increased to 16.8 billion euros ($21.9 billion) from 13.6 billion euros in January. The surplus in the current account, a measure of all trade including services, was 16 billion euros, up from 9.7 billion euros.
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Shipments from Germany to the euro area dropped 4.1 percent in February from a year ago, while those to the European Union decreased 3.4 percent. Exports to non-EU members fell 1.9 percent, today’s report showed.
The European Central Bank last week said it stands ready to cut interest rates if the region’s economy deteriorates further, and that officials are also considering further non-standard measures to stimulate growth.
Lending to the private sector fell for a 10th month in February, while manufacturing and services activity contracted more than forecast in March, adding to signs that the gradual recovery predicted by ECB President Mario Draghi may not materialize.
Still, Schaeffler AG, an industrial bearing maker that’s the biggest investor in car-parts producer Continental AG, said on March 21 that demand in North American and Asia will more than make up for a drop in European sales this year.
“While it’s clear that Germany can’t de-couple itself from the euro area, the rest of the world is proving relatively stable,” said Johannes Gareis, an economist at Natixis in Frankfurt. “That’s helped make up for the weakness in Europe.”