German exports surprise on the upside
Germany’s flagging economy enjoyed a surprise fillip in October, as exports rose beyond well beyond expectations.
According to Germany’s official statistics body Destatis, exports rose 1.2% month-on-month. The surprise hike - analysts had been expecting a 0.7% decline - was underpinned by strong sales to non-European Union countries; exports of German goods to the EU rose 0.1% year-on-year, but by 4.6% to the rest of the world.
On a seasonally-adjusted basis, the trade surplus was €20.6bn compared to €19.2bn in September, wider than most analysts had predicted. The headline non-seasonally adjusted trade surplus rose to €21.5bn from a revised €21.2bn a month earlier.
The figures were a rare piece of good news from the German economy, which has been verging on recession for several quarters, dragged down by a weakened manufacturing sector.
On Friday, the euro fell sharply after data showed the country's core industrial sector had suffered its worst downturn for a decade, with industrial output down 5.3%. The manufacturing-heavy German economy is the eurozone’s largest.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said net exports had got off to a "“strong start" in the fourth quarter.
But he also sounded a note of caution: "The monthly data have been a poor guide to the quarterly GDP numbers this year, so we are less certain than usual about the underlying trend; at the very least, we need to see more data, especially on import and export prices, which usually are a key driver of the deflated GDP net trade data.
"What’s clear now, though, is that the run-rate in net exports will look better through 2019 as a whole compared to horror-show through 2018."