Page last updated at 09:45 GMT, Monday, 9 June 2008 10:45 UK

Robust trade aids German economy

Man works on tyre at German firm Continental
German firms are growing less optimistic despite rising employment

Strong export growth has helped Germany boost its trade surplus but analysts have warned of weaker economic conditions affecting future prospects.

Its surplus rose to an above-forecast 18.7bn euros ($27.6bn; 14.1bn) in April from 16.6bn euros the month before, according to official figures.

Despite the strong euro, the total value of exports was 14% higher than April 2007 and 1.2% higher than March.

But experts said slowing growth across Europe would inevitably hit trade.

'Losing steam'

"Data on exports is looking good," Andreas Rees, an economist at Unicredit, said of the latest figures

But he added: "In coming months, exports will lose steam significantly. The weakness will come from the eurozone and Britain."

The picture of the economic situation has not changed with the latest figures
Andreas Rees, Unicredit

As one of the world's largest exporters, Germany's growth prospects are particularly attuned to the economic health of key trading partners in Europe, North America and Asia.

The strong euro, which has appreciated strongly against the dollar in the past year, has made life more difficult for exporters.

But trade with fast-growing economies in eastern Europe, the Middle East and Asia continues to hold up well.

With recent figures showing a decline in both industrial production and orders last month, economists believe the economy will struggle even to see modest growth in the second quarter of the year.

"The picture of the economic situation has not changed with the latest figures," Mr Rees added. "We are maintaining our estimate that we will not see growth in the second quarter."

The total value of imports fell 2.1%, on a monthly basis, in March, reflecting softening domestic demand.




SEE ALSO
German jobless rate goes below 8%
29 May 08 |  Business
Euro growth better than expected
15 May 08 |  Business
German firms 'more pessimistic'
24 Apr 08 |  Business

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