Germany: Trade surplus narrows as exports falter in May
July 8, 2013
In May, the seasonally adjusted trade balance showed a EUR 14.1 billion surplus. The figure marks a deterioration compared to the EUR 17.5 billion surplus registered in April and came in below market expectations that had the trade surplus remaining stable at EUR 17.5 billion.
Exports dropped a seasonally adjusted 2.4% over the previous month, which contrasted the revised 1.4% expansion recorded in April (previously reported: +1.9% month-on-month). The sharp drop exceeded market expectations that had overseas shipments declining a more moderate 0.4%. Imports, in contrast, increased 1.7% in May, faster than the 1.2% expansion expected by the market (April: +1.2% mom), which underscores the strength in domestic demand.
Compared to the same month last year, shipments abroad swung from an 8.4% increase in April to a 4.9% contraction in May, which is the sharpest drop since December 2012. As a result, in the 12 months up to May, exports grew 1.7% (April: +2.1% year-on-year), which pushed overseas sales to EUR 1.1 trillion. Meanwhile, imports dropped 2.5% over the same month last year (April: +5.1% yoy), which prompted the 12-month sum of imports up to May to decline 0.8%.
The Federation of German Wholesale, Foreign Trade and Services (BGA) expects that export growth will reach 5% this year to push overseas sales to EUR 1.2 trillion. Nonetheless, the BGA acknowledges that demand from China, which is currently showing sings of deceleration, is not compensating for slack Eurozone orders.
Author: Ricardo Aceves, Senior Economist