German exports fell unexpectedly month-on-month in July after two strong gains.
Data today from the Federal Statistics Office showed exports fell by 1.5 per cent from June, while imports fell by 2.2 per cent, adjusted for seasonal swings.
This yielded a trade surplus with the rest of the world of €12.7 billion in July, up from €12.4 billion in June, and below expectations for a surplus of €12.9 billion.
Exports have been the main driver behind Germany's recovery from its sharpest post-war recession last year, helping Europe's largest economy to grow at 2.2 per cent in the second quarter, its fastest rate since reunification.
However, economists expect the pickup to slow in the second half of 2010, not least because of the gloomy outlook for some of Germany's main trading partners. Adding to this, recent indicators have begun to point towards a slight slowdown.
"A firework display of positive economic data can no longer be expected in the coming months after industry orders recently fell as well," said Thorsten Polleit at Barclays Capital.
"In some countries like the United States and China growth has already slowed. These could be precursors to a declining upswing here. Germany can't detach itself form the global cycle in the long run."
Data yesterday showed German manufacturing orders unexpectedly fell in July at their steepest rate in more than a year, weighed down by weaker demand from abroad and a below-average volume of big orders.
On the upside, the pickup is broadening and German consumers, helped by low unemployment, may finally be coming out of their shells as manufacturing activity starts to ease.
Germany's services sector expanded at its fastest rate in three years in August.
Other analysts said monthly data were volatile and were not overly alarmed by the drop in exports, which compared with a consensus forecast for an unchanged reading.
"The numbers fluctuate strongly from month to month, so I wouldn't read too much into this decline. A correction was to be expected after the unusually strong previous months," said Dirk Schumacher of Goldman Sachs.
"The trend continues to point upwards, albeit a little bit weaker than in the second quarter," he said.
Of the 30 companies in the blue chip DAX index, 23 beat market expectations with their earnings in the quarter to end-June and 12 hiked their outlooks, signalling businesses are still going to profit from the export-led rebound.
Germany, which buys and sells more than half its goods within the European Union, was the world's biggest goods exporter from 2003 to 2008, before being overtaken by China.
Reuters