German exports fall more than expected as demand cools in Europe, U.S.
- Exports down 0.6% m/m, twice as much as forecast
- Exports to U.S. down 3.9%
- Imports post strongest m/m fall since January
BERLIN, Dec 2 (Reuters) - German exports fell more than expected in October, as high inflation and supply chain snags hit demand in its key trading partners, further raising the spectre of recession for Europe's largest economy.
Exports declined by 0.6% on the month, twice as much as analysts had predicted in a Reuters poll, data from the Federal Statistics Office showed on Friday.
October marked the second month in a row of falling exports, after September saw an unexpected drop of 0.5% on the month.
Shipments to Germany's top export partner, the United States, saw the sharpest fall of 3.9% in October, while exports to other European Union member states were down 2.4%.
Imports were also much weaker-than-expected, posting their sharpest drop since January at 3.7%, leading to a higher trade balance of 6.9 billion euros ($7.3 billion). Imports had been forecast to drop 0.4%.
The statistics office publishes a detailed table with more economic data.
"Not only German consumers, but also the export industry is facing more difficult times," said DekaBank economist Andreas Scheurle.
"The German export engine is noticeably juddering," said German chambers of commerce and industry (DIHK) trade chief Volker Trier. "High inflation rates and a tight monetary policy in important sales markets are dampening international demand."
DIHK said last month Germany's exports were likely to fall 2% next year due to a sluggish global economy, with nearly half of German companies that sell abroad expecting an economic downturn.
Also last month, German industrial group Thyssenkrupp (TKAG.DE) warned its sales and profit would "nosedive" next year as high inflation and energy costs are compounded by an expected recession in Europe.
"The decisive thing now is to set positive impulses for strengthening foreign trade," said BGA trade association president Dirk Jandura, calling for strong investments in German and European locations as well as new trade strategies and agreements.
However, data released last week showed the German economy grew slightly more in the third quarter than suggested by preliminary figures, adding to signs that a coming recession may not hit as hard as initially feared.
Near-full gas storage in Germany has eased fears of possible rationing in industry this winter, while the 0.4% growth in the third quarter pointed to a milder recession than many economists first expected.
A survey published on Thursday showed Germany's manufacturing sector reported continued weaker demand in November but the downturn slowed as signs of fewer material shortages fuelled hopes that cost pressures could also ease.
($1 = 0.9502 euros)
Our Standards: The Thomson Reuters Trust Principles.