Trade figures suggest German economy gaining strength

German exports rose in April and imports surged even more, data showed today, suggesting Europe’s largest economy is regaining some momentum after it contracted at the end of 2012.

Data from the Federal Statistics Office showed imports jumped by 2.3 per cent versus March, well above forecasts.

That offers hope to struggling euro zone states seeking to export their way out of the crisis and also adds weight to the theory that German consumers will be able to bolster growth and offset dwindling demand from European markets.

Exports climbed by 1.9 per cent, far more than the mid-range forecast in a Reuters poll for a 0.2 percent rise.

"This is good news. The April figures are significantly better than those for the first quarter," said Commerzbank economist Ralph Solveen.

“This gives hope that exports are picking up and lending momentum to the German economy. We’ve also seen stronger demand from abroad in industry orders.”

Germany has traditionally been an export-driven economy but the government is relying on private consumption to prop up growth this year as it expects foreign trade to be a drag given that much of the eurozone, where Germany sends 40 per cent of its exports, is lingering in recession.

While today’s data suggests exports could help buoy the economy to some extent, a survey published earlier this week showed new export orders in the manufacturing sector declined slightly for a third straight month in May.

A breakdown of unadjusted data showed exports to the eurozone rose by 4.3 per cent in April on the year, while exports to countries outside of Europe soared by 13.6 per cent.

German firms are looking to China and other non-European markets to boost sales.

Continental AG has said improving markets in North America should help lift first-half sales to match year-ago levels and BASF announced it would go on a hiring spree in the Asia Pacific region as it aims to double sales to customers there by 2020.

The data also contained signs that eurozone countries were selling more goods to Germany, with imports from states in the single currency bloc up 5.4 per cent in April compared with the same month last year, more than exports, which points to some rebalancing in the region.

The seasonally-adjusted trade surplus widened slightly to €17.7 billion from €17.6 billion in March. The consensus forecast was for it to narrow to €17.2 billion.

Recent data has painted a mixed picture of the German economy. Sentiment surveys have improved and have all risen, orders have slumped, unemployment has also edged up and retail sales have fallen.

Reuters