German exports dropped more than economists forecast in April after surging to the highest monthly value on record in March.

Exports, adjusted for work days and seasonal changes, fell 5.5 per cent in April from a month earlier, when they jumped a revised 7.2 per cent, the Federal Statistics Office in Wiesbaden said today.

Economists had forecast a 3 per cent decline, according to the median of 11 estimates in a Bloomberg News survey.

Imports dropped 2.5 per cent from March.

The German economy, Europe's largest, may struggle to maintain its momentum after expanding at the fastest pace in almost a year in the first quarter.

While unemployment fell in May for a 23rd month and business confidence held steady, investor sentiment waned and manufacturing growth weakened.

"The German economy continues to be on an upward trend but the speed of expansion should slow markedly in the remainder of the year," said Heinrich Bayer, an economist at Deutsche Postbank AG in Frankfurt.

"While we don't need to worry about the German manufacturing sector given the strong volume of orders, there is no reason to be euphoric either."

German companies are boosting investment and hiring to meet booming export demand from emerging Asia, even as surging energy prices sap household spending power and euro-area countries including Greece toughen austerity measures.

Foreign demand for investment goods helped factory orders to rebound in April from a slump in the previous month.

Bloomberg