Euro area exports fall in July

Euro-area exports declined in July, adding to signs of a recession after the economy was pushed into a contraction in the second quarter.

Exports from the 17-nation euro region fell a seasonally adjusted 2 per cent from June, when they gained a revised 2.4 per cent, the European Union's statistics office in Luxembourg said today. Imports slipped 1.2 per cent and the trade surplus narrowed to €7.9 billion from €9.3 billion.

European companies have seen waning export demand as governments toughened spending cuts to plug budget gaps just as economies around the world showed signs of a slowdown.

In the US, industrial output unexpectedly fell in August by the most since March 2009. The European Central Bank on September 6th lowered its economic projections for this year and next and reiterated its pledge to buy government bonds along with the region's rescue fund to help counter the region's fiscal crisis.

"We've seen a difficult economic environment over the past months partly because of a waning global dynamic," said Andreas Scheuerle, an economist at Dekabank in Frankfurt. "The situation will remain difficult in the second half. The euro- region economy is in recession and that means the most important trading market is in an extremely weak condition."

German exports dropped 4.2 per cent in July from the previous month, while Italy reported a decrease of 4.5 per cent, today's report showed. In France, shipments fell 0.2 per cent. Greece had a drop of 7 per cent, while Spain and Portugal reported gains of 1.4 per cent. Irish exports advanced 1.5 per cent from the previous month.

Economic confidence dropped in August and manufacturing and service industries contracted. Unemployment, meanwhile, held at a record high of 11.3 per cent in July.

Euro-area exports to the US rose a non-seasonally adjusted 12 per cent in the first six months from a year earlier, while shipments to the UK increased 7 per cent, today's report showed. Exports to China and Russia surged 10 per cent and 17 per cent, respectively, while Japan shipments climbed 16 per cent. Detailed trade data are published with a one-month lag.

Elsewhere in the world, China's imports unexpectedly fell in August from a year earlier and industrial output rose the least in three years, reports showed last week. Japan's economy expanded in the second quarter at half the pace the government initially estimated, underscoring the risk of a contraction.

In the US, the world's largest economy, industrial production fell 1.2 per cent in August, figures from the Federal Reserve showed on September 14th. A separate report showed purchases cooled at retailers excluding car dealers and service stations. US employers added 96,000 workers in August after a 141,000 increase in the previous month.

Bloomberg