Biggest rise in German exports gives relief from recession fears

BERLIN: German exports posted their biggest rise in almost two years in September, data showed on Friday, providing some relief amid widespread concerns that Europe’s largest economy will dip into recession in the third quarter.
The Federal Statistics Office said seasonally adjusted exports increased by 1.5 per cent on the month. That was their biggest increase since November 2017 and compared with economist expectations for a rise of 0.4 per cent.
“While there is no doubt that industry is in recession, the entire German economy could have avoided another contraction — and hence a technical recession — at the very last minute,” said ING economist Carsten Brzeski.
The economy shrank by 0.1 per cent in the second quarter, and recent data have suggested manufacturing fared badly in the third, which could put Germany in a technical recession — usually defined as two straight quarters of contraction.
“Today’s trade data suggest that there has been hardly any negative drag from net trade on third-quarter gross domestic product,” he said, adding private consumption looked like it had increased slightly and construction was flat or positive.
Data published this week has painted a mixed picture of the industrial sector, with output falling more than forecast in September while orders rose more than expected. A survey showed Germany’s manufacturers remained stuck in recession in October as new orders fell.
Speaking about Friday’s data, Landesbank Baden-Wuerttemberg economist Jens-Oliver Niklasch said: “This looks like a revival in foreign trade but looking at the whole year, September is more of an outlier”.
He said foreign trade had been rather weak throughout 2019 and added that the risks in overseas trade had declined but not disappeared. A 0.4 decline in exports to non-euro zone European Union countries between January and September compared with the same period last year could be due to Brexit, he said.
— Reuters