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UPDATE 1-Global slump sparks record German export drop

Published 01/08/2009, 02:42 AM
Updated 01/08/2009, 02:48 AM
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BERLIN, Jan 8 (Reuters) - German exports posted a record fall in November as demand for cars and others mainstays of the manufacturing economy plummeted, deepening worries about the country's already bleak 2009 outlook.

Adjusted for seasonal swings, exports fell by an unprecedented 10.6 percent month-on-month in November, Federal Statistics Office figures showed on Thursday.

It was the biggest monthly drop since reunification in 1990, sending the euro briefly lower against the dollar and the pound.

Alexander Koch, an economist at Unicredit, described the latest trade figures as "horrible."

"Global demand is collapsing. It's not helping that German companies are basically in good shape and highly competitive. The data show that trade will weigh massively on growth in the fourth quarter," Koch said.

Deutsche Bank has already predicted the German economy could contract by up to 4 percent this year -- which would been more than four times as bad as the country's previous worst post-war performance.

Imports also fell, dipping 5.6 percent on the month, meaning Germany's adjusted trade surplus shrank to 10.7 billion euros from 15.8 billion in October, the Office said. A surplus of 14.5 billion euros had been forecast in a Reuters poll.

The same survey of economists had forecast exports would drop by 2.8 percent on the month, and imports by 1.9 percent.

A spokesman for the Office said the figures showed the car and chemical industries had been among the many hit in November.

Carmakers such as Daimler and Volkswagen have already carried out or considered cuts to production to compensate for weak demand.

Exports to non-euro zone EU countries fell by 16.1 percent on the year. They fell 7.8 percent to non-EU countries.

The figures showed demand for German goods was weakest from European Union countries outside the euro area -- like Britain. The pound fell sharply against the euro in the run-up to Christmas making German goods more expensive in Britain.

Year-on-year, exports declined by 11.8 percent in unadjusted terms. Imports were down by 0.9 percent.

In the first 11 months of the year, exports were up by 4.0 percent from 2007, with imports rising by 7.3 percent. (Writing by Dave Graham; editing by Noah Barkin)

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