German exports drive surplus

Germany's trade surplus hit a record high in October as a leap in exports to countries outside the European Union showed German…

Germany's trade surplus hit a record high in October as a leap in exports to countries outside the European Union showed German firms continued to profit from strong global demand in the fourth quarter.

Adjusted for seasonal swings, the surplus unexpectedly rose to €17.2 billion from €15.0 billion in September, according to Federal Statistics Office data showed.

The October figure was the highest since German reunification in 1990 and well above the narrower €13.4 billion surplus forecast by economists.

With adjusted exports worth a record €81 billion in October, Germany is on track to remain the world's top exporter of goods for the fourth year in a row in 2006.

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Compared with the previous month, exports rose by 2.6 per cent in adjusted terms, after a 6.5 per cent surge in September, while imports were down by 0.2 per cent on the month.

A spokesman at the Statistics Office said all goods categories had seen a sharp increase in exports in October.

The outlook for the coming months, however, is less clear.

Since late October, the euro has appreciated sharply, making it harder for German companies to be competitive in key export markets. The euro hit a 20-month high against the dollar last week and was selling at around $1.328 early this morning.

Recent reports suggest German firms remain optimistic about business prospects despite gains in the euro and evidence of slower growth in big export markets like the United States.