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German Exports Rise More Than Forecast; Production Falls Unexpectedly

GermanIndustrialOutput 050815

Germany's exports and imports growth exceeded expectations in March, while industrial production declined unexpectedly from February, adding to uncertainty about the economic expansion in the first quarter.

According to data published by Destatis, exports grew 1.2 percent month-on-month in March, much faster than a 0.4 percent rise forecast by economists. But it was slightly slower than the 1.4 percent rise seen in February.

Imports advanced 2.4 percent, while growth was expected to ease to 0.1 percent from 1.3 percent seen in February.

As growth in imports outpaced export growth, the seasonally adjusted trade surplus dropped to EUR 19.3 billion from EUR 20 billion in February.

Industrial production declined unexpectedly by 0.5 percent in March after staying flat in February, another report from Destatis revealed today. Economists had forecast a 0.4 percent rise for March.

However, factory orders advanced 0.9 percent in March offsetting February's 0.9 percent fall, Destatis said yesterday.

Excluding energy and construction, industrial output fell 0.8 percent in March from February. Energy production remained flat, while construction output grew 2.1 percent.

Within overall output, the production of capital goods and intermediate goods declined 1.4 percent and 0.8 percent, respectively. An increase of production of 0.7 percent was recorded for consumer goods.

On a yearly basis, industrial output edged up 0.1 percent in March, slower than the prior month's 0.2 percent rise. It was also weaker than the expected growth of 0.5 percent.

Today's data have created uncertainty, rather than clarity, Carsten Brzeski, chief economist at ING-DiBa said. The German growth picture seems to be more mixed than buoyant sentiment indicators have been suggesting.

The current German performance is not enough to maintain the top spot in the Eurozone, Brzeski noted. "However, when it comes to the length and the continuity, Germany's performance is still out of reach for the rest of the Eurozone."

Destatis is slated to publish the first quarter GDP data on May 13.

The executive arm of the European Union earlier this week lifted the Eurozone growth forecast for this year to 1.5 percent from the 1.3 percent seen in February. Germany's growth is set to outpace overall euro area growth, with GDP seen rising 1.9 percent.

Germany exported goods to the value of EUR 107.5 billion and imported goods to the value of EUR 84.5 billion in March. These were the highest monthly export and import values ever recorded.

On a yearly basis, exports logged a double-digit growth of 12.4 percent and imports gained 7.1 percent.

On an unadjusted basis, the trade surplus increased to EUR 23 billion in March from EUR 19.5 billion in February. It was forecast to rise to EUR 20 billion.

Similarly, the current account surplus rose to EUR 27.9 billion from EUR 16.6 billion a month ago.

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