UPDATE 2-Export resilience shows Germany coping with euro

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By Dave Graham

BERLIN, April 9 (Reuters) - German industry underlined its resilience to the strong euro with a better-than-expected export performance in February that augured well for the first quarter, but didn't dispel concerns about the longer-term outlook.

Adjusted for seasonal swings, Germany exported 85.2 billion euros ($134.4 billion) worth of goods in February, the same as in January, the Federal Statistics Office said on Wednesday.

A Reuters poll had predicted an 0.3 percent drop in exports on the month ECONDE. Imports unexpectedly fell 0.4 percent, widening the trade surplus to 16.4 billion euros from 16.1 billion in January. A surplus of 15.8 billion had been forecast.

Juergen Michels, an economist at Citigroup in London, said the figures suggested trading activity would significantly boost German growth in the first quarter of this year.

"I assume we'll again see good export figures in March. But over the course of the year, the momentum should slow. Weaker global demand and the significant rise in the value of the euro EUR= EUREER=ECBF are going to play their part," he said.

Economists say the German economy has yet to feel the full impact of the appreciation in the euro, which rose sharply against the dollar from late February through much of March.

Top European policymakers have spoken out against exchange rate volatility, most recently at a meeting of finance ministers and central bank governors at the weekend in Slovenia.

UPBEAT SENTIMENT

Germany is the world's largest exporter of goods, selling almost one trillion euros worth in 2007, and foreign trade has been a key engine for growth in recent years.

The euro's rise against currencies like the dollar and the British pound EURGBP= has raised concerns euro zone exporters will struggle to stay competitive with foreign rivals. The euro hit an all-time high against the pound on Wednesday.

So far in 2008, German business sentiment has been robust, and many prominent companies continue to sound upbeat.

Sales of Volkswagen (VOWG.DE) brand vehicles rose more than 8 percent in the first quarter of 2008, Europe's biggest carmaker said on Tuesday.

Volkswagen cited strong showings in its home market of Germany as well as China, Brazil and Argentina.

"The overall market is developing positively," said its sales and marketing chief for Germany, Martin Stangenberg. However, he added it remained open whether Volkswagen could sustain that sales momentum over the whole year.

The latest trade figures showed German exporters made their biggest advances in markets outside the 15-nation euro area.

Year-on-year, exports to other countries in the euro zone rose by 5.6 percent in February and by 13.5 percent to countries outside the European Union, the Statistics Office said.

Powered by growth in manufacturing output and construction activity, Deputy Finance Minister Thomas Mirow said this weekend German growth had likely accelerated in the first quarter from expansion of 0.3 percent in the final three months of 2007.

Unicredit economist Andreas Rees said he now expected quarterly growth of 0.6 percent in the January-March period, before a slowdown to 0.2 percent in the second quarter. (Editing by Stephen Nisbet) (Additional reporting by Kerstin Gehmlich and Rene Wagner; Editing by Ruth Pitchford)