German economy starts year on firm footing

10th January 2007, Comments 0 comments

10 January 2007Berlin (dpa) - The German economy entered the run-up to the start of New Year on a firm footing powered by booming exports and the solid performance of the nation's industrial sector, data released Tuesday showed. Underpinned by strong growth in Asia and other key emerging markets, German exports bounded ahead by 19.6 per cent year-on-year in November with production in Europe's biggest economy surging by a better-than-expected 1.8 per cent month-on-month in November. This followed the relea

10 January 2007

Berlin (dpa) - The German economy entered the run-up to the start of New Year on a firm footing powered by booming exports and the solid performance of the nation's industrial sector, data released Tuesday showed.

Underpinned by strong growth in Asia and other key emerging markets, German exports bounded ahead by 19.6 per cent year-on-year in November with production in Europe's biggest economy surging by a better-than-expected 1.8 per cent month-on-month in November.

This followed the release Monday of figures showing new orders for machinery and plants racing ahead by 18 per cent in November compared to the same month last year while the number of companies in the country applying for insolvency fell by 16.9 per cent.

Economists had expected a smaller 1.1 per cent increase in industrial production with strong demand for German-produced cars helping to boost both output and industrial orders.

"The foreign trade figures again clearly present a positive surprise," said Commerzbank economist Matthias Rubisch.

German firms had profited from extensive restructuring in recent years, increasing their competitiveness in global markets, Rubisch said.

"The unusually strong export figures of the past few months are mainly due to deliveries of goods to countries outside the European Union," he said.

But as a sign that a slowing global economy might have started to impact on German exports, Tuesday's trade data said exports edged down by a seasonally adjusted 0.5 per cent month-on-month in November and that imports fell by 3.8 per cent.

Indeed, economists believe that the world economy will cool in the coming months undercut by an economic slowdown in the US.

With this in mind, Rubisch warned that as global demand slowed, industrial production and the volume of orders from abroad could lose impetus.

In the meantime, the year-on-year jump in exports helped to lead Germany's trade surplus to a monthly record of 18.5 billion euros (24 billion dollars) in November 2006, the Federal Statistics Office said releasing the latest trade figures.

The surplus, the balance between the volume of goods exported and the volume of goods imported, was up 1.1 billion euros from October and 5.8 billion euros from November 2005.

Seasonally adjusted, the November 2006 surplus amounted to 19.3 billion euros, the highest level since German unification in 1990.

Germany exported goods worth 85.2 billion euros in November, up 19.2 per cent on the year, while imports were up 13.9 per cent at 66.7 billion euros.

The rise in exports brought total exports in the 11 months to November up to 822.6 billion euros, an increase of 14.3 per cent from a year earlier.

Exports to countries outside the EU increased by 37.3 per cent, while imports grew 15.9 per cent.

This compared to exports to Germany's EU partners, which rose by 9.4 per cent in November. Imports from the EU rose 12.7 per cent.

The current account balance, which includes transfers and services, rose by more than 50 per cent to 12.5 billion euros, from 8 billion euros in November 2005.

DPA

                                               Subject: German news

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