Bloomberg News

German Exports Rose More Than Economists Forecast in May

July 08, 2011

(Updates with comment from economist in fourth paragraph.)

July 8 (Bloomberg) -- German exports increased more than economists forecast in May, adding to signs the sovereign debt crisis isn’t harming Europe’s largest economy.

Exports, adjusted for work days and seasonal changes, increased 4.3 percent from April, when they fell 5.6 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 1.5 percent, according to the median of 12 estimates in a Bloomberg News survey. Imports rose 3.7 percent from the previous month.

German factory orders and industrial production both increased in May, suggesting the economy is weathering the region’s fiscal crisis. With countries from Spain to Ireland cutting spending, companies have relied on faster-growing markets to boost sales. Munich-based Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, said yesterday deliveries jumped 16 percent in June.

“The upward trend is still intact,” said Thilo Heidrich, an economist at Deutsche Postbank AG in Frankfurt. “While the May figure is something of a rebound from a weak April, the German economy is in a very good state due in large part to demand from Asia.”

The euro was little changed after the report, trading at $1.4342 at 9:02 a.m. in Frankfurt. The single currency has appreciated 7.1 percent against the dollar this year.

Audi ‘Optimistic’

From a year earlier, exports jumped 19.9 percent, today’s report showed. The trade balance widened to 14.8 billion euros ($21 billion) from 10.8 billion euros in April. The surplus in the current account, a measure of all trade including services, was 6.9 billion euros, down from a revised 9 billion euros.

German factory orders were boosted by a surge in domestic demand in May. Business confidence increased in June and the Bundesbank said last month while growth is likely to be “considerably weaker” in the second quarter, “this should not be interpreted as an economic slowdown.”

Volkswagen AG’s Audi luxury-car division said yesterday that German sales jumped 18 percent in June from a year earlier, while demand also increased in China and Brazil.

“The first half of the year went better than we expected,” said Peter Schwarzenbauer, Audi’s marketing and sales chief. “We’re also optimistic for the coming months.”

‘Positive Momentum’

Exports to the 27-member European Union jumped 17.4 percent to 54.5 billion euros in May from a year earlier, while sales to the euro region increased 16.1 percent to 36.8 billion euros in that period, today’s report showed. Sales to countries outside the EU advanced 24 percent to 37.6 billion euros from a year earlier, the statistics office said.

Luxury clothier Hugo Boss AG said on July 6 that it may raise its 2015 profitability goal as it expands its own-brand chain and operations in Asia. China, where demand for expensive menswear is rising, will probably become the German company’s third-largest market this year, overtaking France and the U.K., Chief Financial Officer Mark Langer said last month.

“Germany continues to do well,” said Sarah Hewin, an economist at Standard Chartered Bank in London. “It’s one of the countries that has benefited most from” the global recovery.

The European Central Bank yesterday raised its benchmark interest rate for the second this year by 25 basis points to 1.5 percent. President Jean-Claude Trichet said at a briefing in Frankfurt that the euro region shows “positive underlying momentum” and exports “should continue to be supported by the ongoing expansion in the world economy.”

--With assistance from Kristian Siedenburg in Budapest and Holger Elfes in Dusseldorf. Editors: Simone Meier, Craig Stirling

To contact the reporter on this story: Jeffrey Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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