German imports fell sharply for the second time in three months in June and exports also dropped, data showed today, adding to signs the single currency bloc’s crisis is beginning to hurt Europe’s largest economy.
Imports slumped by a seasonally adjusted 3 per cent on the month, data from the Federal Statistics Office showed, reversing a 6.2 per cent gain in May and falling much more sharply than the 1.5 per cent drop forecast by economists in a poll.
Exports fell a seasonally adjusted 1.5 per cent on the month, in line with expectations. A purchasing managers’ survey last week showed new export orders falling for a 13th straight month amid softer demand from China and the US.
“This is a correction of May’s strong increase. We will see a falling trend in demand in the coming months, particularly from the Eurozone countries,” said Citigroup’s Juergen Michels, adding that he still expected exports to grow this year.
Coming on the heels of worse-than-expected industrial orders for June, the trade data pointed to weakness in Europe’s growth engine and paymaster as the Eurozone crisis and austerity measures implemented in struggling states bite.
Shipments to Eurozone countries, which make up around 40 per cent of all German exports, fell by 3.0 per cent year-on-year in June but exports to non-Eurozone countries were up 4.8 per cent, the data showed.