German export growth slows in June

German exports weakened in June to reinforce fears the global economy hit a soft spot that month and prompting fresh questions…

German exports weakened in June to reinforce fears the global economy hit a soft spot that month and prompting fresh questions about the sustainability of the country's upturn.

The Federal Statistics Office said Germany's trade surplus widened to €14.7 billion  in June, a record for the month, but exports fell compared with May on a seasonally adjusted basis in what economists said was a potential warning sign.

Data to be released on Thursday should show Germany's economy grew 0.5 per cent in the three months to end June compared with the first quarter, according to a Reuters poll of 31 economists last week.

Economists said the trade data was consistent with that forecast but reinforced doubts about what will happen to the German economy if its exports stall.

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According to the statistics office, exports rose an unadjusted 16.1 per cent year on year to €63.0 billion, while imports rose 10.7 per cent to €48.3 billion.

However, compared with May, exports fell by a seasonally adjusted 5.8 per cent, while imports eased 4.7 per cent. It was the biggest month on month decline in exports since October 2003, according to Bundesbank figures.

A quarterly survey of German manufacturers conducted for the European Commission last month showed export volume expectations dipped slightly at the start of the third quarter although remained well above their long-term average level.