| German imports, exports fall in June as crisis bites |
BERLIN German imports fell sharply for the second time in three months in June and exports also dropped, data showed on Wednesday, adding to signs the single currency bloc’s crisis is beginning to hurt Europe’s largest economy.
Imports slumped by a seasonally adjusted 3 per cent on the month, data from the Federal Statistics Office showed, reversing a 6.2 per cent gain in May and falling much more sharply than the 1.5 per cent drop forecast by economists.
Exports fell a seasonally adjusted 1.5 per cent on the month, in line with expectations.
A purchasing managers’ survey last week showed new export orders falling for a 13th straight month amid softer demand from China and the US.
“This is a correction of May’s strong increase. We will see a falling trend in demand in the coming months, particularly from the euro zone countries,” said Citigroup’s Juergen Michels, adding that he still expected exports to grow this year.
Coming on the heels of worse-than-expected industrial orders for June, the trade data pointed to weakness in Europe’s growth engine and paymaster as the euro zone crisis and austerity measures implemented in struggling states bite. Shipments to euro zone countries, which make up around 40 per cent of all German exports, fell by 3 per cent year-on-year in June but exports to non-euro zone countries were up 4.8 per cent, the data showed.
Austerity-hit businesses and consumers in struggling euro zone countries have imported fewer goods of late and Spain’s May current account data, published last week, pointed to plummeting domestic demand, with Spain importing 2.1 per cent fewer goods on the year.
German manufacturers have also been feeling the effects of a slowdown in China, with BASF, the world’s top chemicals maker, receiving no major orders from China this year and Siemens, Europe’s biggest engineering conglomerate, saying major sales to China were becoming rare.
Still, economists expect demand from emerging markets to help cushion the trade blow from Europe.
“If things cool down outside of Europe then exporters will feel it. But we haven’t seen that yet in orders data,” said Stefan Kipar of BayernLB.
Wednesday’s import figures dampened hopes, raised by a recent survey showing consumer morale in Germany inched up heading into August, that domestic demand will help buoy the economy through a slowdown in the euro zone and Asia.
Imports slumped by 4.9 per cent in April, before rebounding in May, and then retreating again in June.
Germany’s economy has traditionally been export-driven but many economists expect private consumption to be the most important driver of growth this year as Germans benefit from low unemployment and higher pay in the chemical and engineering sectors following successful wage negotiations.
Agencies
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