UPDATE 1-German growth seen solid as exports soar, output dips

* Ind. output fell unexpectedly in Sept, down 0.8 pct m/m

* Analysts say recovery entering period of consolidation

* Sept exports grow twice as fast as expected

* Output data sends euro to day’s low vs dollar (EUR=: )

(Adds quotes, background)

By Sarah Marsh and Paul Carrel

BERLIN, Nov 8 (BestGrowthStock) – German exports soared in September
while industrial output faltered, indicating Europe’s largest
economy will post solid if unspectacular third quarter growth
later this week as the recovery eases.

Exports grew twice as fast as expected in September, up 3.0
percent on the month when seasonally adjusted, and the trade
surplus reached its widest in nearly two years at 15.6 billion
euros, data from the Federal Statistics Office showed on Monday.

“Demand side data for the quarter suggests we have a
broad-based continuation of the upswing,” said UniCredit’s
Alexander Koch.

“Of course, we are seeing quite a deceleration compared to
the previous quarter, but with expectations for quarterly third
quarter growth of around 0.75 percent, this is still a rather
respectable growth rate for the German economy.”

Gross domestic product data is due on Nov 12. The median
estimate in a Reuters poll of 40 economists is for growth of
0.70 percent. By contrast, the German economy expanded at 2.2
percent quarter-on-quarter in the second quarter of the year,
its fastest rate in reunified Germany.

The strength of the euro and a stuttering outlook for some
of its global trading partners are likely to weigh on demand for
German manufacturing goods, and data already points to a
slowdown in the industrial sector that has powered the recovery.

Output fell by 0.8 percent on the month in seasonally
adjusted terms, the Economy Ministry said, missing the median
forecast for a 0.5-percent increase in a Reuters poll and
sending the euro to the day’s low against the dollar. (ECONDE: )

The decline was the greatest since October 2009. Yet
analysts said the fall in industrial output was unlikely to
change their third quarter GDP estimates given the strong export
data and solid long-term averages for output data.

Output rose 1.2 percent on a rolling two-month basis.

“A slight decline in September is not the end of the world,”
said Andreas Scheuerle at Dekabank. “The industrial sector and
indeed the economy seems to be continuing to grow but at a more
moderate rate.”

For a graph on German industrial output and GDP, click on:



Industry orders also fell in September, plunging at their
steepest rate since the start of 2009, data showed last week.

But analysts said order books were still well-filled and
German industrial production still looked resilient.

“Germany will almost certainly outperform its euro zone
peers in the third quarter and even next year,” said Jennifer
McKeown at Capital Economics. “This is partly because of its
strong, competitive position — even if exports slow — and
partly because the fiscal squeeze will be less tight.”

Out of the 22 companies in Germany’s blue-chip DAX index
that have so far reported earnings in the quarter to
end-September, 15 have posted better-than-expected profit.
(Additional Reporting by Klaus Lauer in Berlin and Maria
Sheahan in Frankfurt; Editing by Stephen Nisbet)

UPDATE 1-German growth seen solid as exports soar, output dips