November 8, 2018 / 10:02 AM / 4 days ago

German trade surplus narrows as U.S. trade friction bites

FILE PHOTO: Aerial view of containers at a loading terminal in the port of Hamburg, Germany August 1, 2018. REUTERS/Fabian Bimmer/File Photo

BERLIN (Reuters) - German exports unexpectedly fell by more than imports in September, narrowing the trade surplus as trade friction with the United States slows the traditional growth engine in Europe’s largest economy.

The Federal Statistics Office said on Thursday that seasonally adjusted exports fell by 0.8 percent on the month in September, with imports down 0.4 percent.

A Reuters poll of economists had pointed to a 0.3 percent rise in exports and a 0.8 percent increase in imports. Germany’s trade surplus narrowed to 17.6 billion euros ($20.09 billion) from a revised 18.2 billion euros in August.

“A combination of slowing world trade and temporary factors like the new emissions norms for autos hit the German export sector over the summer months,” ING economist Carsten Brzeski wrote in a research note.

The Federal Statistics Office will publish preliminary gross domestic product growth data for the third quarter next Wednesday.

Trade disputes abroad and political tensions at home are both leaving their mark on a still exports-dependent economy which is now in its ninth year of expansion.

Household spending has become an important growth driver for Germany as exports have weakened. Consumers are reaping the benefits of record employment levels, rising real wages, increased job security and cheap credit due to the euro zone’s expansive monetary policy.

Nonetheless, several economic institutes said last week the German economy probably shrank in the third quarter after posting quarterly growth rates of 0.4 percent in the January-March period and 0.5 percent in the second quarter.

However, data released on Tuesday showed industrial orders rose unexpectedly in September, driven by bulk orders and higher demand from domestic and other euro zone clients, suggesting the economy ended the third quarter on a solid footing.

Writing by Paul Carrel; Editing by Michelle Martin

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