* Trade surplus narrows, export drop biggest in six months
* Unadjusted imports highest level in postwar history
* Economists see exports remaining pillar of economy
(Adds economist quote, details, background)
By Brian Rohan
BERLIN, Dec 8 (Reuters) - Germany's trade surplus narrowed slightly in October on an unexpected fall in exports, but demand for foreign goods was robust and economists saw no reason to doubt the country's recovery.
Adjusted for seasonal swings, exports fell 1.1 percent on the month, while imports rose 0.3 percent, figures from the Federal Statistics Office showed on Wednesday. That compared to expectations for exports to rise 0.5 percent on the month and imports to increase by 1.5 percent.
The drop in exports was the biggest in six months, helping to shrink October's trade surplus to 14.3 billion euros from 15.4 billion a month prior. Unadjusted imports stood at their highest level in postwar history -- 72.6 billion euros, the Office said.
"There was a strong increase in September and now there was a bit of a correction in October," said Thorsten Polleit from Barclays Capital. "Nevertheless exports remain a pillar of economic growth."
"The export success is stimulating consumption and investment at home," he added. "That's why the imports are rising -- the domestic demand is improving."
Germany suffered its biggest postwar recession in 2009 when its economy contracted 4.7 percent as global demand plummeted. However, it has emerged faster than expected from the slump and left most fellow euro zone countries trailing in its wake.
Forward-looking indicators suggest Europe's largest economy is now poised to strengthen its performance, with domestic demand playing an ever-more important role even if overall trade volumes should ebb in 2011.
Manufacturing orders rose in October, rebounding despite a fall in euro zone demand as the sector sidestepped a fall in exports from countries which share the common currency thanks to an increasing focus on emerging markets.
A survey released last week showed growth accelerating in November on new orders, allowing employers to hire at their fastest pace since a survey-record high posted in March 2008.
WORLDWIDE SLOWDOWN
An abundance of recent positive data suggests Germany will head into next year full of momentum, but has raised concerns it is leaving other euro zone countries too far behind.
The trade data from October should work to allay some of those concerns -- it showed German demand lending increasing support to trading partners who share the euro.
Imports from other euro zone countries to Germany rose 17 percent in October compared to the same month a year earlier, while a broader category covering the entire EU showed imports rose 18.3 percent.
Economists say rising private consumption in Germany is playing an increasingly important role.
European Union members like France, which have in the past decried Germany's traditionally weak consumer spending as a cause of economic imbalances within the bloc, should find some satisfaction in the trade data.
Meanwhile, export-oriented companies are also showing signs of improvement. Steelmaker ThyssenKrupp late last month forecast higher profits in 2011 driven by solid economic growth at home and in emerging economies.
"Business is running very good abroad for companies," said Alexander Koch form Unicredit. "That suggests that this was only a short-term correction for exports."
Germany's upbeat data rush has led forecasters to boost their estimates for the months ahead, with the Bundesbank now expecting the economy to grow 3.6 percent in 2010 and reach pre-crisis levels by 2011.
Those forecasts, an upward revision from the central bank's previous outlook, top government estimates for 3.4 percent growth this year and 1.8 percent growth in 2011.
Hurdles do remain for Germany's export sector however, traditionally the economy's main growth engine.
Economists expect the global economic recovery to downshift next year as the U.S. rebounds less quickly than expected and growth in emerging countries moderates.
"The dynamic growth with exports will nevertheless weaken a bit in the months ahead," said Joerg Lueschow from WestLB. "The reason for that is that worldwide growth will probably slow somewhat. That will hit our exports with a bit of a time lag." (Additional reporting by Erik Kirschbaum; editing by Stephen Nisbet)