German trade surplus up

Germany's trade surplus ended the third quarter bigger than expected due to lower imports in September, but slower export growth and weaker orders showed the economy is losing support from foreign demand as the euro soars. The surplus widened to an adjusted 17.9 billion euros ($26.26 billion) in September, the Federal Statistics Office said on Thursday.
A Reuters poll had forecast a reading of 16 billion. Year-on-year, exports were up 3.3 percent in September, the smallest gain since March 2005. Since July 2006, exports had risen at an annual rate of at least nine percent every month. Imports were down by 0.4 percent from September 2006, the first annual decline since January 2004, the Office said.
Compared with August, exports were up in seasonally adjusted terms, while imports fell unexpectedly. Economists, such as Matthias Rubisch at Commerzbank in Frankfurt, said this should mean the German economy grew robustly in the third quarter.
"Nevertheless, there is a certain loss of overall momentum, as is apparent from the considerably lower year-on-year (export growth) figure," he said. "Slower global growth and the euro's appreciation point to this downward trend continuing."
Concern about the euro's rise to record highs and the cost of oil has dampened sentiment among investors and firms in Germany, and leading forecasters believe Europe's largest economy will see a palpable slowdown in growth next year.
Economists say Germany provides a good indication of global trading activity as it has been the top exporter of goods since 2003, and is also one of the world's biggest importers.
Figures released on Tuesday showed German manufacturing orders fell more than expected in September. Industrial output posted a surprise rise in the month, but economists said record oil prices and the euro would hit growth in the next few months. Deputy economy minister Walther Otremba told Reuters on Tuesday the German economy probably grew as much as 0.75 percent in the third quarter. It expanded by 0.3 percent in the second quarter, after growth of 0.5 percent in the first.
The Federal Statistics Office is due to publish a preliminary estimate of third-quarter gross domestic product (GDP) on November 14 and a detailed breakdown on November 22.
Exports rose on the month in adjusted terms in September by 0.7 percent to 83.1 billion euros, outpacing the 0.4 percent gain forecast in the Reuters poll, Thursday's figures showed. Imports declined by 2.6 percent to 65.2 billion euros. An increase of 0.3 percent had been forecast. A Reuters calculation showed that both exports and imports rose in the July to September period by 2.5 percent.