Bloomberg News

German Exports Rebounded in November, Bolstering Economy

January 09, 2012

(Adds euro in fifth paragraph.)

Jan. 9 (Bloomberg) -- German exports rebounded in November from a slump, helping bolster Europe’s largest economy as the debt crisis clouds growth prospects.

Exports, adjusted for work days and seasonal changes, rose 2.5 percent from October, when they slumped 2.9 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 0.5 percent, the median of 13 estimates in a Bloomberg News survey showed. Imports declined 0.4 percent from October, when they rose 0.1 percent.

Germany’s economy is cooling after a worsening fiscal crisis prompted governments from Italy to Ireland to toughen budget cuts, pushing the currency union toward a recession. While some exporters have relied on faster-growing markets to boost sales, manufacturing contracted last month and factory orders slumped the most in almost three years in November.

“This has to be seen as a rebound after a strong decline in October,” said Ulrike Rondorf, an economist at Commerzbank AG in Frankfurt. “But of course export growth in Germany has slowed. Companies are confronted with reduced demand.”

The euro was little changed after the report, trading at $1.2725 at 8:05 a.m. in Frankfurt.

The trade surplus widened to 16.2 billion euros ($20.6 billion) from 11.5 billion euros in October, today’s report showed. The surplus in the current account, a measure of all trade including services, was 14.3 billion euros, up from 10 billion euros a month earlier.

France, Italy

Germany’s economy may still drive the region’s expansion this year, with gross domestic product rising 0.8 percent, according to the European Commission. In France and Italy, GDP may increase 0.6 percent and 0.1 percent, respectively, it said. In 2013, German GDP will probably rise 1.5 percent.

Porsche SE has said it anticipates U.S. sales to rise to more than 30,000 cars on demand for the revamped 911 sports car. German rival Daimler AG plans to produce a record 988,110 Mercedes-Benz brand cars and sport utility vehicles in Germany in 2012, Automotive News Europe reported Jan. 1.

“We are better prepared for a potential crisis” than during the 2009 recession because of lower production costs, Norbert Reithofer, chief executive officer of German carmaker Bayerische Motoren Werke AG, said on Dec. 15. He also reiterated 2011 profit to rise “significantly.”

European Turmoil

While German business confidence rose for a second month in December, European economic sentiment fell to the lowest in more than two years, with consumers the most pessimistic. Euro-region unemployment held at 10.3 percent in November, the highest in more than a decade.

Europe’s turmoil is also affecting the global economy, clouding prospects for exporters. The International Monetary Fund will probably cut its forecast for global growth, Managing Director Christine Lagarde said on Jan. 6. The Organization for Economic Cooperation and Development in November also lowered growth forecasts for its 34 member states to reflect doubts that the monetary union will survive the crisis.

Siemens AG, Europe’s largest engineering company, forecast stagnant 2012 profits in November. HeidelbergCement AG Chief Executive Officer Bernd Scheifele told Rhein-Neckar-Zeitung he expects a “difficult” business environment because of rising energy costs and the sovereign debt crisis.

The European Central Bank has stepped up its use of unconventional tools to help bolster the economy, offering banks unlimited cash, buying government bonds and cutting borrowing costs to 1 percent, matching a record. The central bank will hold its next monetary assessment on Jan. 12.

“We expect the ECB to respond to likely euro-zone GDP contraction in the fourth quarter of 2011 and the early months of 2012 by cutting interest rates further,” said Howard Archer, chief European economist at IHS Global Insight in London. “Rates could very well come down as low as 0.5 percent in the second quarter of 2012.”

--With assistance from Kristian Siedenburg in Budapest. Editor: Simone Meier

To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net

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


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