German exports fell unexpectedly in October while vibrant domestic demand pushed up imports, narrowing its trade surplus and adding to evidence that Europe’s biggest economy started the fourth quarter on a weak footing, data showed on Friday.
The German economy, which is expected to grow by more than 2 percent this year, is enjoying a consumer-led upswing, propelled by record-high employment, rising real wages, moderate inflation and ultra-low borrowing costs.
Seasonally adjusted exports edged down by 0.4 percent on the month while imports jumped by 1.8 percent, data from the Federal Statistics Office showed. The exports figure confounded expectations for a 1.0 percent rise while imports beat a forecast for a 1.1 percent increase.
“German industry has gone through a small rollercoaster ride since the start of the summer,” ING economist Carsten Brzeski said, adding that disappointing numbers had been followed by impressive rebounds.
“Behind the vacation and weather-driven white noise of monthly data, however, there is a clear upward trend,” Brzeski said. “The export sector has once more become an important growth driver in 2017.”
A breakdown of unadjusted figures showed that German imports from other European Union countries surged by 10.1 percent while those from countries outside the bloc rose by 4.8 percent.
The seasonally adjusted trade surplus narrowed to 19.9 billion euros from a upwardly revised 21.9 billion euros in September. The October reading was lower than the Reuters consensus forecast for 21.8 billion euros.
Germany’s wider current account surplus, which measures the flow of goods, services and investments, fell to 18.1 billion euros after an upwardly revised reading of 25.8 billion euros in September, unadjusted data showed.
The trade figures followed economic data released on Thursday that showed industrial output fell unexpectedly in October – a drop economists linked to public holidays that let workers take long weekends.
The weak figures came after data on Wednesday showed that industrial orders had risen unexpectedly in October, suggesting that output could bounce back in the coming months.
Rising exports and business investment in equipment helped the German economy to shift into a higher gear in the third quarter – it expanded by 0.8 percent on the quarter, up from 0.6 percent in the previous three months.
“This week’s industrial data show that even the German economy can have weaker moments,” Brzeski said, adding that the fourth quarter could bring a slowdown in overall growth.
For 2017 as a whole, the Ifo institute predicts economic growth of 2.3 percent which would translate into a calendar-adjusted expansion rate of 2.6 percent – the fastest pace in six years.