Euro zone September trade surplus above expectations

 

The European Union's statistics office Eurostat said the 16 countries using the euro had a trade surplus with the rest of the world of 2.9 billion euros in September, up from 1.4 billion last year and a deficit of 5 billion euros in August.

Eurostat said unadjusted exports grew 22 percent year-on-year in September, while imports were up 21 percent.

Adjusted for seasonal swings, exports grew 0.6 percent month-on-month in September while imports fell 2.5 percent against August.

"Seasonally-adjusted exports rose...for a second month running in September, thereby suggesting that there was still decent foreign demand for euro zone products" said Howard Archer, economist at IHS Global Insight.

"Nevertheless, the overall growth rate in euro zone exports has clearly moderated in recent months" he said. "Meanwhile, euro zone imports fell...in September, thereby hinting at softening euro zone domestic demand."

BusinessEurope, an industry group representing some 20 million European companies, said in a report that exports were likely to generate almost one third of total 2010 growth which it sees at 1.6 percent.

"Exports have been the main engine of the recovery so far, driving industrial production and stimulating overall economic activity throughout the value chain" BusinessEurope said.

But it also said European businesses were concerned about the recent and sudden appreciation of the euro.

"It will impact on global competitiveness and euro area market shares, will create uncertainty to investment and trade decisions by companies, and will negatively contribute to already unstable financial markets" BusinessEurope said.

"Besides, disorderly and uncoordinated interventions to address currency misalignments may lead to protectionist pressures" the business group added.