Bloomberg News

Euro-Area April Exports Decline as Record Recession Lingers (1)

June 17, 2013

Euro-area exports decreased in April for the first time in four months, as the 17-nation currency bloc struggled to emerge from a record-long recession.

Exports declined a seasonally adjusted 0.8 percent from March, when they increased a revised 2.6 percent, the European Union’s statistics office in Luxembourg said today. April imports grew 0.5 percent after a 1.2 percent drop, and the trade surplus narrowed to 16.1 billion euros ($21.5 billion).

“These numbers are a small setback,” Carsten Brzeski, senior economist at ING Group in Brussels, said by telephone. “You cannot say that exports are a real growth driver at the moment. To see a more sustainable recovery of the euro zone, we’ll have to wait for the second half of this year.”

The European Central Bank this month cut its forecast for the euro area’s economy to show contraction of 0.6 percent this year from an estimate of minus 0.5 percent made in March. ECB President Mario Draghi said that while the economy should stabilize “at a subdued pace” this year, “downside risks” remain, including possible weaker-than-expected domestic and global demand for euro-area goods.

Exports from Germany, Europe’s largest economy, grew 3 percent in April to 41.9 billion euros, today’s report showed. French shipments increased 0.2 percent, while Italian and Spanish exports decreased 2.9 percent and 0.8 percent, respectively.

Record Unemployment

Today’s trade data followed a discouraging report on euro-zone retail sales, which fell 0.5 percent in April. While an index of manufacturing activity based on a survey of purchasing managers rose to a 15-month high in May, it has been below the level indicating contraction since July 2011, according to London-based Markit Economics. Unemployment (UMRTEMU) is at a record 12.2 percent.

The euro was little changed against the dollar after today’s data were released, trading at $1.3345 at 11:34 a.m. in Brussels.

Nominal hourly labor costs in the euro area rose 1.6 percent in the first quarter from the year-earlier period, a separate Eurostat report showed today. In Germany, labor costs were up 3.9 percent, with wages rising 3.5 percent.

The international economic environment “remains extremely volatile and uncertain,” Patrizio Bertelli, chief executive officer at luxury goods maker Prada SpA (1913), said this month after the company reported first-quarter profit growth that decelerated to the slowest pace in at least a year.

‘Slight Recovery’

Daimler AG (DAI) Chief Executive Officer Dieter Zetsche said on June 12 that the European car market is “bottoming out” and a “slight recovery” is possible in the region in the second half of the year. Luxury-car demand in China will continue to outpace the industry-wide growth in the S-Class sedan’s biggest market, he said.

PSA Peugeot Citroen, Europe’s second-biggest carmaker, said on May 22 demand for new vehicles in the region has started to stabilize at a “very low level” after deliveries increased in April for the first time in 19 months.

Maxime Picat, head of the manufacturer’s Peugeot brand, reiterated the Paris-based manufacturer’s forecast that industry sales in Europe will fall 5 percent this year in the sixth consecutive annual decline, and said it’s too early to predict a rebound.

To contact the reporter on this story: Corina Ruhe in Amsterdam at cruhe@bloomberg.net

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


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