Bloomberg News

Euro-Region Exports Increased in January, Bolstering Economy

March 16, 2012

European exports rose for a third month in January, adding to signs the region’s economy is regaining strength after shrinking in the fourth quarter.

Exports from the euro-area advanced a seasonally adjusted 1.3 percent from December, when they increased 0.9 percent, the European Union’s statistics office in Luxembourg said today. Imports rose 2.4 percent from the previous month, when they slipped 0.4 percent. The trade surplus narrowed to 5.9 billion euros ($7.7 billion) from 7.4 billion euros.

European companies are relying on global export demand to bolster sales as governments across the region cut spending and raise taxes to plug budget gaps, eroding consumer spending. While gross domestic product dropped 0.3 percent in the fourth quarter, the economy has since shown some signs of stabilization with economic confidence rising a second month in February and German investor sentiment surging in March.

“We expect euro-zone gross domestic product to contract further in the first quarter of 2012 and very possibly in the second quarter as well,” said Howard Archer, chief European economist at IHS Global Insight in London in an e-mailed note before today’s release. “Companies are under serious pressure to keep their labor forces as tight as possible to contain their costs in the face of current weakened demand.”

Global Economy

The euro pared losses after the data were released, trading at $1.3059 at 11:06 a.m. in Brussels, down 0.2 percent.

The European Central Bank’s latest forecasts show that the euro-region economy may shrink 0.1 percent this year before expanding 1.1 percent in 2013. Exports may increase 2.6 percent and 4.4 percent this year and next, it projected.

The euro’s 6 percent decline against the dollar over the past year has helped encourage exports as the global economy regains strength. The U.S. economy, the world’s largest, will strengthen through 2012, according to a Bloomberg News survey of economists. Claims for jobless benefits dropped last week to match a four-year low and U.S. consumer confidence rose to the highest since 2008.

Germany’s export-driven economy has helped soften the region’s economic slowdown. German GDP may rise 0.6 percent this year, compared with contractions in Italy, Belgium, Greece and Spain, according to the European Commission.

Hugo Boss AG (BOS), the German luxury clothing maker controlled by buyout firm Permira Advisers, on March 14 forecast operating profit will rise more than 10 percent this year, helped by Asian demand, with Chief Executive Officer Claus-Dietrich Lahrs calling the first 2 1/2 months of 2012 “satisfactory.”

Exports to U.S.

“Our business is buzzing,” Bernd Scheifele, chief executive officer of HeidelbergCement AG (HEI), the world’s third- largest cement maker, said on March 15. “Germany won’t see a recession this year.”

Exports to the U.S. rose a non-seasonally adjusted 8 percent in 2011 from a year earlier, while shipments to the U.K., the euro area’s largest market, increased 9 percent, today’s report showed. Exports to China and Russia surged 21 percent and 25 percent, respectively, and Japan shipments climbed 13 percent in that period. Detailed trade data are published with a one-month lag.

To contact the reporter on this story: Simone Meier in Zurich at smeier@bloomberg.net

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


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus