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Economy in Brief

German Trade Trends Slip
by Robert Brusca  September 8, 2011

German exports fell by 1.8% in July after falling by 1.2% in June. But the preceding months found German exports very volatile rising by 4.3% in May falling by 5.6% in April and surging by 7.2% in March and so on. With volatility like that it is hard to pin down trends. But exports do seem to have slowed, to a three-month growth rate of 5% from 10.8% over six months and 6.9% over 12-months.

German imports fell in July but that is more of an isolated event as import growth in Germany stands at 16% over three-months 17.7% over six months and 11.6% over 12-months. It is too soon to say that imports are really dropping or slowing down.

The ratio of exports to imports stands at 113% in July compared to 116% 12-months ago, a testament to the relatively faster growth of German imports over than period.

As a result the German trade surplus has been declining. It fell to €10 bln in July from €11.48 bln in June and compared to €12.3bln 12-months ago.

Data on inflation-adjusted flows lags by one month. But In June both exports and real imports declined. Real exports are falling at a 10% annual rate over three months on an inflation adjusted basis. On that same basis imports are up by 10% over three-months.

There is some evidence here of a slowing in German export markets. But nothing is yet chiseled in stone.

Today the OECD cut its estimated of growth for the OECD area where growth has been persistently downgraded. The potential for Germany to post a quarter of negative GDP growth is being highlighted. We have had quite a bunch of economic data with survey data being quite weak as real-time economic data for Germany has been much better, especially for industrial output and new industrial orders. And the industrial sector does drive Germany. But the trade report is another real time German report. It is disturbing. The US trade report also released today echoes the themes on the German report as US exports weakened sharply over the last three-months, too. Suddenly the real-time reports are flagging slowing giving that idea greater veracity.

German Trade Trends For Goods
  M/M% % SAAR
  Jul-11 Jun-11 3M 6M 12M 12MPrev 2Yr Ago
Balance* € 10.12 € 11.50 € 11.53 € 12.13 € 12.73 € 12.36 € 11.56
Nominal EXPORTS
Goods Exports -1.8% -1.2% 5.0% 11.0% 6.9% 27.5% 4.4%
Capital gds   -3.5% -10.4% 19.4% 6.9% 28.2% -23.2%
Motor Vehicles   -5.2% -11.5% 14.8% 5.9% 35.4% -30.0%
Consumer Gds   1.3% 2.5% 6.8% 6.4% 20.5% -22.4%
Nominal IMPORTS
Goods Imports -0.3% 0.4% 16.0% 17.7% 11.6% 41.4% 8.0%
Capital goods   0.2% 22.7% 21.7% 5.8% 28.7% -9.3%
Motor Vehicles   2.9% -2.8% 8.5% 16.7% 8.5% -12.9%
Consumer goods   1.7% 28.0% 23.7% 7.7% 21.2% -11.8%
Ratio X:M 113.2% 114.9% 116.1% 120.5% 116.3% 123.0% 125.7%
Real X -orders -7.4% 13.1% -6.2% 1.2% 8.3% 35.5% 2.0%
Real Exports   -0.4% -10.2% 11.0% 5.5% 19.6% -20.0%
Real Imports   -1.7% 10.0% 16.1% 0.3% 24.7% -11.3%
Real Ratio X:M   121.8% 122.6% 124.5% 115.8% 120.7% 134.0%
*Eur Blns; mo or period average; Shaded area trends lag one Mo
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