Export machine reawakens

Export machine reawakens
Photo: DPA
Germany's export machine geared up in May, expanding by 4.3 percent to nearly offset a decline in April, data from the national statistics office showed on Friday.

The provisional gain in May left Germany, Europe’s biggest economy and the world’s second biggest exporting nation after China, with a seasonally-adjusted trade surplus of €12.8 billion ($18.4 billion), the Destatis office said.

It revised an initial estimate for April exports to a decrease of 5.6 percent from 5.5 percent.

Imports were 3.7 percent higher in May on the month, Destatis said, following a drop of 2.5 percent in April.

“With consumption climate improving on the back of falling unemployment and rising income, domestic demand and imports should expand stronger than exports, helping other European countries to rebalance their external sectors,” Berenberg Bank senior economist Christian Schulz forecast.

On a 12-month comparison, German exports showed an increase of 19.9 percent, while imports were 15.6 percent higher.

Figures provided by the German central bank put the current account of the balance of payments, a broad measure of trade and financial transfers with other countries, at a surplus of €6.9 billion in May. That was more than double the year-earlier figure of €3.1 billion.

The numbers suggest there is still life in the German export mechanism, which has accounted for much of the country’s economic growth but which might begin to face headwinds owing to a slowdown in global activity.

On Thursday, the economy ministry reported that German industrial output rebounded in May, gaining 1.2 percent on a monthly basis after a decline of 0.8 percent in April.

Industrial orders gained 1.8 percent overall meanwhile, far exceeding analysts expectations and pointing to sustained support for manufacturers in the coming months.

Although foreign orders fell by 5.8 percent, orders from within Germany increased by 11.3 percent.

The economy is officially expected to expand by 2.6 percent this year following growth of 3.6 percent in 2010, but Chancellor Angela Merkel has said that forecast could be raised above 3.0 percent in the coming months.

Domestic consumption has begun to show signs of life, as unemployment falls further below the politically sensitive three-million mark.

A breakdown of the Destatis figures showed that Germany’s trade with partners in the 17-nation eurozone grew on a balanced basis in May. Exports increased by 16.1 percent to a total of €36.8 billion, and imports were 16.2 percent higher at €34.9 billion.

Berlin has been accused by some in the eurozone of growing at the expense of its neighbours, a charge the numbers refuted.


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