German exports rebound in November

FRANKFURT: German exports rose more than expected in November, official data showed Monday, but analysts said it was too soon to signal a recovery as Europe’s largest economy continues to face a series of headwinds.

Exports totalled 131.2 billion euros ($143 billion) in November, a 3.7-percent jump on the previous month, federal statistics agency Destatis said, ending several months of decline.

Analysts surveyed by FactSet had forecast an increase of just 0.7 percent.

The stronger-than-expected rebound was driven by a 5.4 percent rise in exports to fellow European Union countries, while those to the United States were down by 1.4 percent.

Overall imports were down 1.9 percent, widening the country’s trade surplus to 20.4 billion euros.

While the export bounce brought “some relief”, ING bank economist Carsten Brzeski cautioned against reading too much into the data.

On the year, exports were down five percent, he pointed out.

“Supply chain frictions, a more fragmented global economy and China moving from a dynamic export destination to competitor are all factors weighing on the German export sector,” he said.

High energy costs in the wake of Russia’s war in Ukraine and higher interest rates have also taken their toll on the powerhouse economy, hitting the crucial industrial sector particularly hard.

Separate data released by Destatis on Monday showed that factory orders rose by a modest 0.3 percent in November, less than analysts had expected.

The “very weak increase in industrial orders shows that the economy is still far from a substantial recovery,” said Brzeski.

The German economy is widely expected to have ended 2023 in recession, with the government predicting a 0.4 percent contraction.

The German central bank last month slashed its growth forecast for 2024 to 0.4 percent, from an earlier prediction of 1.2 percent.