German Exports See Knock-on Effect of Eurozone Crisis

German exports, the driving force of Europe's top economy, are being weighed down by the eurozone debt crisis, data showed Friday, amid otherwise promising signs.

Seasonally adjusted data showed that Germany's trade surplus fell slightly in March to 17.6 billion euros ($23.0 billion) from 17.7 billion euros in February, according to figures from the federal statistics office.

Comparing the monthly figure to data 12 months ago, a decline of unadjusted exports data accelerated, with the value of exports falling by 4.2 percent, having shown a fall of 2.8 percent in February.

But imports fell by even more, by 6.9 percent on a 12-month comparison.

The European Union remains the main trading partner for Germany. German exports to the EU in March amounted to 53.8 billion euros of which 35.3 billion euros' worth went to other eurozone countries.

But the effect of the three-year-long debt crisis in eurozone countries continued to be felt although Germany has on the whole weathered the turbulence much better than many of its partners.

On a 12-month basis, German exports to the eurozone fell by 7.0 percent whereas exports to EU countries outside the eurozone fell by 2.2 percent, and to non-European countries by 2.6 percent.

Germany's export-driven economy has avoided the deep recession suffered by many crisis-hit eurozone countries, but growth nevertheless slowed to just 0.7 percent in 2012 from 3.0 percent the previous year.

A report in business daily Handelsblatt last week said that Germany expected weak economic growth of just 0.2 percent for the year's first quarter and of 0.3 percent in the second quarter.

German industrial output showed a surprisingly robust rise in March, after output nudged up in February, data showed Wednesday, a day after better-than-expected figures for factory orders showed a rise in March.

Johannes Gareis, an analyst with Natixis, said the trade surplus data supported the view that the German economy had managed to avoid a first-quarter contraction.

"On the back of decreasing imports and slightly rising exports, we expect external trade to contribute positively to GDP growth," he said.

"Nevertheless the outlook for Germany's exports for the rest of the year remains subdued against the backdrop of the eurozone debt crisis and weak world demand," he added in an analysts' note.

Surplus with eurozone still falling: analyst

In unadjusted terms, Germany's trade surplus increased in March for the third month in a row, rising to 18.8 billion euros from 16.8 billion euros in February.

The unadjusted value of imports rose to 75.8 billion euros and of exports to 94.6 billion euros.

But after adjustment for seasonal factors, the surplus slipped slightly to 17.6 billion euros.

The surplus for February was, however, revised upwards to 17.7 billion euros from 17.1 billion euros announced previously.

At Berenberg Bank, senior economist Christian Schulz commented that exports rose by 0.5 percent from the level in February and imports by 0.8 percent.

"As exports started from a much higher base, the overall trade balance increased to 18.8 billion euros," he noted.

"Trade in the first quarter of 2013 overall was weak, as exports were 4.2 percent lower year-on-year in the first quarter of 2012 and imports 6.9 lower," he said.

He added: "In the first quarter, exports remained under serious pressure from weak demand in the eurozone. In addition, some wobbles in non-European markets in quarter one and competition from Abenomics-supercharged Japanese exporters started to make an impact.

"While Yen-weakness is likely to remain a problem for German exporters for some time, demand in the eurozone and the rest of the world should stabilize over the course of the year. However, exports may be less of a growth engine this year than recently."

He also commented that "despite the decline in imports from the eurozone, Germany's trade surplus with the currency zone is continuing to decline."