German Economy German exports surge to record


German exports have surged above their pre-crisis level to set a record after rising more than 7 per cent in March, according to official figures.

The rapid pace of export growth highlighted the strength of Europe’s largest economy at the start of the year. Data on Friday will show German gross domestic product grew by 1 per cent or more in the first quarter compared with the previous three months, economists said.

In turn, Germany’s growth spurt should help boost the overall eurozone performance – but not mask the weak performance of countries such as Spain, Greece, Portugal and Ireland.

German exports totalled €98.3bn in March, almost 16 per cent higher than the same month in 2010, according to the federal statistics office. That was the highest monthly total since the data started to be compiled in 1950. It exceeded the total of €88.8bn in April 2008 – before the collapse of Lehman Brothers investment bank later that year.

After seasonal adjustment, exports in March were 7.3 per cent higher than the previous month. Ulrike Rondorf, economist at Commerzbank in Frankfurt, said exporting companies were “on cloud nine”. Although the late timing of Easter might have boosted the data, global trade had also revived in the first three months of 2011, she said.

The rapid pace of German exports might not last long. German industrial orders fell 4 per cent in March, data showed last week, with export orders falling faster than domestic orders – a possible sign that demand for the country’s industrial products was slipping. Economists expect German growth to slow later this year in the face of higher oil prices, fiscal austerity in much of Europe, higher European Central Bank interest rates, and worries created by geopolitical tensions in north Africa and the Middle East. The stronger euro will also hit exporters’ prospects.

The latest data could also fuel worries that Germany’s recovery remains imbalanced – with export-led growth still not feeding through into stronger domestic demand.

Eurozone policymakers hope the growth spurt will broaden into stronger domestic demand. So far, however, German consumer spending has shown few signs of springing into life. Retail sales fell by more than 2 per cent in March, data showed last week.

German imports, which at €79.4bn in March were 16.9 per cent higher than a year earlier, have also set a fresh monthly record. But the rise largely reflected higher oil prices.