German trade, output gains as Europe’s economy rebounds

By Andrew McCathie, dpa

German trade and production surged in June as signs emerged that Europe’s economy is rebounding from a dramatic slump triggered by the coronavirus crisis.

Monthly output in Germany jumped by 8.9 per cent in June, the Federal Statistical Office (Destatis) said on Friday, while exports grew at 14.9 per cent, as a result helping to build on the solid gains in May. Both figures also topped analysts’ forecasts.

The July export figure represented the biggest monthly increase since records began in 1990, Destatis said.

June imports also gained, growing by 7 per cent from a 3.6-per-cent rise in May, Destatis said. However, analysts had forecast a stronger 10.6-per-cent increase in June.

The promise of better economic times was repeated across the 19-member eurozone with both France and Spain – the currency bloc’s second and fourth largest economies – also posting further major gains in output on Friday.

But economists warned that the German economy could lose momentum in the coming months as it struggles to reach pre-crisis levels.

“In other words, the recovery from here will be slow and uneven,” said Claus Vistesen, chief eurozone economist with the Pantheon Macroeconomics research group.

Friday’s data followed Destatis’ release on Thursday of figures showing a record rise in German industrial orders, which shot up by 27.9 per cent in June to post their second monthly gain.

Monthly production in Germany’s key car industry, which was badly hit by the crisis, was up 54.7 per cent in June, Destatis said.

However, this was still about 20-per-cent lower than in February and before the German economy was hit by the full force of the pandemic.

The latest round of data stood in stark contrast to the massive falls posted in March and April, when large tracts of German public and economic life were in lockdown to contain the spread of the deadly coronavirus.

The data also represented an upbeat end to the second quarter when German gross domestic product shrank by 10.1 per cent, its biggest contraction in 50 years, amid the economic devastation unleashed by the global pandemic.

But overshadowing the brighter economic outlook are fears that a series of fresh outbreaks of the virus across Germany totalling about 1,000 new cases a day could lead to a second lockdown later in the year.

A survey by pollsters Civey published this week in the news magazine Spiegel found a significant majority of Germans expect new tough measures to ward off the pandemic.

However, Bernd Althusmann, economic minister in the central German state of Lower Saxony – home to the world’s biggest carmaker Volkswagen –  warned in an interview on Friday with the daily Hannoversche Allgemeine Zeitung that a second lockdown would be catastrophic.

“We have to expand our pandemic management now, because we cannot afford a second general shutdown,” Althusmann said. “That would be an economic and social catastrophe.”

But speaking in Berlin on Thursday, Health Minister Jens Spahn said he not believe a further shutdown of business would be necessary.

“The health-care system can cope with around 1,000 new infections per day,” he said.

Be the first to comment on "German trade, output gains as Europe’s economy rebounds"

Leave a comment

Your email address will not be published.