German Exports Grow For Third Month, Trade Surplus Unexpectedly Increases

Although at a slower pace, German exports increased for the third month in a row in August on rising global demand. The better-than-expected export growth helped the trade surplus to increase surprisingly, strengthening recovery hopes.

According to provisional data released by the Federal Statistical Office on Tuesday, exports rose by a calendar and seasonally adjusted 2.3% month-on-month in July, slower than a downwardly revised 6.1% increase in June, but larger than the 1.2% rise expected by economists. Annually, exports slipped 18.7% to EUR 70.5 billion.

At the same time, imports remained flat on a monthly comparison in July versus a revised 5.9% rise in June and the expected rise of 1%. Germany imported commodities worth EUR 56.6 billion, down 22.3% from July 2008.

Monthly growth for exports and imports for June was upwardly revised from 7% and 6.8%, respectively.

In July, the trade surplus increased to EUR 13.9 billion from a revised surplus of EUR 12.1 billion in June. The consensus forecast for July was EUR 11.3 billion. A year ago, the trade balance recorded a surplus of EUR 14 billion.

Meanwhile, the current account surplus totaled EUR 11 billion compared to June’s revised EUR 13.5 billion. But,the surplus stood above the expected EUR 10 billion. The surplus for July include a deficit of EUR 3.3 billion in services, factor income net of EUR 4.3 billion, negative EUR 2.7 billion in current transfers and supplementary trade items of minus EUR 1.2 billion.

Germany dispatched commodities worth EUR 43.4 billion to the EU member states, while it received commodities to the value of EUR 37.1 billion from those nations. From July 2008, exports to and imports from the EU nations slipped 20.5% and 20.4%, respectively.

Meanwhile, exports to euro area totaled EUR 29.4 billion, down 19.5% from last year, while the value of the commodities received from those countries amounted to EUR 26.7 billion, which was 20.5% lower than in July 2008.

Exports of commodities to nations outside the European Union or third countries declined 15.7% to EUR 27.1 billion in July and imports from those countries fell 25.7% to EUR 19.5 billion.

A report released by the Federal Ministry of Economics and Technology on September 7 revealed a 3.5% monthly growth in factory orders in July, marking the fifth consecutive rise. A rise in the new orders in the third quarter is also likely to result in industrial output growth, the ministry said.

The ministry is slated to issue the industrial output data for July at 6.00am ET. After falling 0.1% in June, industrial production is expected to grow 1.6% in July.

According to the Paris-based Organization for Economic Co-operation and Development’s latest Interim Economic Assessment, global recovery from the recession is likely to arrive earlier than expected. Eurozone GDP is expected to fall 3.9% versus previous estimate of a 4.8% decline. The decline forecast for German GDP was upwardly revised to 4.8% from 6.1% for 2009.