German exports unexpectedly registered a sharp drop in June but industrial production rose, official data showed Wednesday, as Europe鈥檚 biggest聽economy聽struggles to emerge from a weak period.
Exports dropped 3.4 per cent from the previous month and stood at 127.7 billion euros ($139.3 billion), federal statistics agency Destatis said in a statement.
It was the second straight monthly drop and far worse than a forecast from analysts surveyed by FactSet, who had predicted an increase of 1.3 per cent.聽
Exports to the European Union were down 3.4 per cent compared to the previous month while beyond the bloc they were down by 3.5 per cent.
The United States was still the biggest importer of 鈥榤ade in Germany鈥� goods, although exports to the world鈥檚 biggest聽economy聽fell 7.7 per cent.聽
Germany imported 107.3 billion euros worth of products in June, a slight increase on the previous month, with its trade surplus coming in at 20.4 billion euros.聽
On a more positive note, factory output rose 1.4 per cent in June compared to the previous month, according to Destatis.
That represented a turnaround from a sharp drop in May and was slightly better than a forecast by analysts surveyed by FactSet.
The rise was driven by improvements in the auto industry and the manufacture of electrical equipment.聽
Weakness in the crucial manufacturing sector has been blamed in part for a broader slowdown in the German聽economy, and the聽economy聽ministry cautioned the latest data do not indicate the problems are over yet.聽
鈥楪loomy business expectations in the manufacturing sector indicate that industrial activity will remain subdued,鈥� it said in a statement.聽
Buffeted by multiple headwinds, the German聽economy聽shrank in 2023 but had started the year on a positive note with signs that a recovery was taking hold.聽
But recent data, including an unexpected contraction of the聽economy聽in the second quarter, suggest the rebound may be losing steam.聽
ING economist Carsten Brzeski said Wednesday鈥檚 data sent a 鈥榤ixed message鈥�.
鈥榃hile falling exports point to ongoing structural weaknesses, the increase in industrial production keeps hopes alive of at least a meagre industrial rebound in the second half of the year,鈥� he said.