January 18, 2020

Off the Charts: In World Trade Data, Signs of a Slowdown

The accompanying charts show the change in exports and imports of goods in 12 large countries — the industrialized countries in the Group of 7, in addition to Australia and four emerging economies, China, Brazil, India and South Korea. All figures are in United States dollars.

Of the 12, only China, with an 8 percent gain, posted faster growth in exports than the United States. Canada reported a small gain, but the others showed declines. In their local currencies, South Korea and India had gains, but they were erased by the decline of those currencies against the dollar.

Import totals can provide an indication of economic woes, as declining incomes cause consumers to buy less, including fewer items from abroad. Imports fell in Germany, France and particularly Italy. This week, the European Union reported that the euro zone economy declined in the fourth quarter — the third consecutive fall. Germany’s economy, which had been growing slowly, also shrank.

In the United States, imports of goods rose just 3 percent in 2012. It was the second consecutive year, and the sixth year in the last seven, that exports grew more — or, in 2009, shrank less — than imports. Before that, imports rose faster than exports for eight consecutive years, from 1998 through 2005.

The United States runs a trade surplus in services, not shown in the chart, but the trade deficit in goods widened slightly in 2012 to $727.9 billion. That figure is still well below the deficits from 2004 through 2008, before the credit crisis and recession caused international trade to decline rapidly in 2009. The strong gains many countries experienced in 2010 and 2011 reflected a return to more normal levels.

Exports plunged in all countries during the crisis, but the trends since then have varied. German exports in 2012 were 3 percent lower than in 2008, while French exports were off almost 8 percent. Japanese and British exports were about 2 percent higher. The United States, by contrast, reported exports of goods in 2012 that were up 20 percent from 2008, and Brazilian exports were 23 percent higher.

Those gains pale next to those of developing Asian economies. South Korean exports in 2012 were 30 percent higher than in 2008, while China bolstered its shipments by 43 percent. Indian exports were 50 percent higher.

The charts also show changes in American trade with the other 11 countries listed. Exports to most of the European countries fell in 2012, but exports to France rose sharply. France has resisted austerity more than most of its neighbors, something that may have contributed to the rise.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2013/02/16/business/economy/in-world-trade-data-signs-of-a-slowdown.html?partner=rss&emc=rss

German Automakers Bet on U.S. Market and Win

German carmakers, at least, had a different vision of the future.

The recovery in the U.S. auto market, which produced big earnings growth at Chrysler and Ford in their fourth quarter, has also been a boon for Germany’s Big Three — Daimler, BMW and Volkswagen.

Their double-digit increases in U.S. sales last year reflected an overall surge in demand by American buyers for European and, above all, German products. Well-designed vehicles and machinery, so coveted a Germany specialty that they can often fetch premium prices, were by far the biggest categories of European exports to the United States.

As a result, overall German exports to America rose 24 percent in October from a year earlier, outpacing the 18 percent growth for euro zone exports to the United States.

In many ways, German success has let German carmakers invest in further success when it comes to the American market. The German companies are cashing in on years of commitment to the United States, which remained an important market for them even as the global auto industry trained its sights on China.

Volkswagen, for example, has invested $4 billion in the United States since 2008, building a factory in Chattanooga, Tennessee, that began churning out Passat sedans in 2011.

“Five years ago we reset the clock here in America,” Martin Winterkorn, the chief executive of Volkswagen, said in Detroit last month. “The Passat was made in America for America.”

BMW and Daimler’s Mercedes-Benz unit have been making sport utility vehicles and other autos in America since the 1990s: BMW in Spartanburg, South Carolina, and Mercedes in Tuscaloosa, Alabama. Both brands have expanded their appeal in the United States by moving carefully into more affordable parts of the market, for example with an entry-level Mercedes sedan for less than $30,000.

That presence put them in position to take advantage of the revival of the U.S. car market. BMW vehicle sales in the United States rose by 14 percent last year including the Mini brand; sales of Daimler’s Mercedes and Smart brands increased more than 15 percent; and Volkswagen’s U.S. sales soared 34 percent, including Audi brand cars.

For Mercedes and VW, those were better growth rates than in China, and helped to offset slower sales there.

Germany’s success contrasts with results by European rivals like Renault and PSA Peugeot Citroën, which abandoned the U.S. market decades ago. Now the French car makers are short of ways to counterbalance the stricken European market. It is probably too late for them to re-enter the U.S. market, even if they could afford the cost of re-establishing a dealership network.

Mercedes and VW are so well placed in America that they even did a little strutting during the televised Superbowl football championship on Sunday, airing splashy commercials.

In the Mercedes spot, the actor Willem Dafoe, playing the devil, offers a young man a new CLA sedan in exchange for his soul. After a fantasy sequence in which the young man cuddles with the model Kate Upton, dances alongside Usher and overtakes Formula One cars on a racetrack, he sees a billboard advertising the CLA for $29,900. He realizes he can afford one without Satan’s help.

The spot is part of a Mercedes strategy to appeal to a younger, less affluent market.

The euro zone recession would clearly be much worse than it is without support from U.S. customers. While Germany has been the main beneficiary, accounting for 40 percent of euro zone exports to the United States, countries including France, Italy and Spain also recorded big gains in sales in America of products that span categories from chemicals to wine.

Britain, which is in the European Union but not the euro zone, expanded exports to America by 11 percent in October from a month earlier. That made Britain second to Germany in total sales of goods to the United States that month, with about €4 billion, or $5.4 billion, in October versus €8 billion for Germany, according to official figures.

At least part of Britain’s gain came from sales in America of the BMW Mini, which is made in Oxford, England.

Article source: http://www.nytimes.com/2013/02/05/business/global/german-automakers-bet-on-us-market-and-win.html?partner=rss&emc=rss

Euro Watch: Unemployment Continues to Climb in Euro Zone

The euro zone jobless rate rose to 11.8 percent in November from 11.7 percent in October, according to Eurostat, the statistical agency of the European Union. Eurostat estimated that 18.8 million people in the euro zone were unemployed in November, two million more than a year earlier.

Germany has provided momentum to the European economy over the past three years, as strong exports protected the country from the crisis.

But on Tuesday, the Federal Statistics Office in Berlin said that German exports declined 3.4 percent while imports slid 3.7 percent in November from a month earlier. The weakness narrowed Germany’s trade surplus to €14.6 billion, or $19 billion.

German factory orders also fell in November amid weak demand from outside the euro area, the Economy Ministry said Tuesday. Orders, adjusted for seasonal swings and inflation, slid 1.8 percent from October, when they jumped 3.8 percent.

“The November numbers are not a one-off but an extension of the current trend of weakening exports,” Carsten Brzeski, an economist at ING, wrote in a research note Tuesday. He pointed out that German exports had fallen about 4 percent since May.

“Today’s data confirmed our view that exports should have turned from driver of growth into drag on growth,” he wrote.

A separate report from Eurostat showed that retail sales fell 2.6 percent in November from a year earlier, though they gained 0.1 percent from October.

The gloomy reports come as the Governing Council of the European Central Bank prepares to hold a policy meeting Thursday, followed by an interest-rate announcement. Despite a sharp decline in bank lending reported last week, which had some analysts suggesting that the central bank might try new steps to stimulate the economy, economists surveyed by Reuters said they expected the E.C.B. to leave policy unchanged in January as it waited for a clearer picture of economic conditions.

Like their counterparts in the United States, Japan and Britain, the monetary authorities in the euro zone have already opened the spigots, allowing banks to borrow essentially as much as they want at the benchmark rate. Mario Draghi, president of the E.C.B., has pledged to do whatever is necessary to ensure the stability of the euro, including, if needed, buying the sovereign bonds of Spain and Italy to hold their borrowing costs to sustainable levels.

The president of the European Commission, José Manuel Barroso, said Monday in Lisbon that “the existential threat against the euro has essentially been overcome. ”

“In 2013 the question won’t be if the euro will, or will not, implode,” he said.

The central bank’s actions have succeeded in calming markets and driving down government bond yields for embattled countries. The European Commission reported Tuesday that an index of economic sentiment in the euro zone had improved by 1.3 points in December, to 87. “Economic sentiment in the euro area improved among consumers and across all sectors, except retail trade,” the commission reported.

Gilles Moëc, an economist at Deutsche Bank in London, said the data Tuesday were consistent with expectations that the euro zone economy would remain in recession through the winter, with the unemployment rate possibly rising to as high as 12.4 percent.

“We’re still far below the level of growth that would stabilize the labor market,” he said.

But he added that the commission’s report on economic sentiments, as well as recent surveys of purchasing managers, suggested that the downturn in the manufacturing sector had “bottomed out,” making possible a return to growth later in the year.

“External demand seems to be holding up better than we had thought,” Mr. Moëc said. “Now we are to a large extent dependent on what happens in the United States,” he added, referring to the negotiations on spending.

Europe also got a vote of confidence from Tokyo on Tuesday, as Finance Minister Taro Aso said Japan would buy bonds of the European Stability Mechanism, the euro zone bailout fund, as well as sovereign debt in the currency zone.

“The financial stability of Europe will help the stability of foreign exchange rates, including the yen,” Mr. Aso was quoted by the Nikkei newspaper as saying.

Attacking joblessness may require governments to ease back on austerity measures that many economists, including some at the International Monetary Fund, say might have gone too far. In France, President François Hollande has vowed to turn around the flagging labor market, where, according to Eurostat, unemployment was 10.5 percent in November.

Eurostat said Spain, which is suffering from the collapse of a real estate bubble and the impact of a raft of tough austerity measures, had the highest unemployment rate in the bloc, at 26.6 percent. Greece, where the sovereign debt crisis began, was next at 26 percent, according to data released in September. The lowest rates were in Austria, at 4.5 percent; Luxembourg, at 5.1 percent; and Germany, at 5.4 percent.

Worryingly, youth unemployment in the euro zone continued to grow, with 5.8 million people under age 25 classified as jobless in November, up 420,000 from a year earlier.

The Greek prime minister, Antonis Samaras, who was in Berlin for talks with Chancellor Angela Merkel on Tuesday, singled out youth unemployment as one of the biggest challenges Greece faces in reviving its economy. But he said at a news conference before meeting the chancellor that, over all, he was positive.

“I see the glass half-full,” Mr. Samaras said before taking part in an economic conference in Berlin. “We’re delivering and Europe’s helping.”

It was the Greek prime minister’s second trip to Berlin since taking office. The mood appeared lighter than during his visit in August, which came on the heels of calls from within Ms. Merkel’s government for Greece to leave the common currency.

Greece is focusing its efforts on winning back the trust of Europeans, as well as the markets, Mr. Samaras said. But he emphasized that high unemployment, especially among young people, weighed heavily on Greeks.

“I would like to make it clear up front that our country is making enormous efforts and many are paying a high price, in order to get things back on track,” Mr. Samaras said.

Ms. Merkel said that Greece’s European partners must continue to support the country. She was perhaps wary of the fragility of Mr. Samaras’s three-party coalition government, which has been pushing through deeply unpopular reforms.

“We also must do everything to guarantee economic growth, security and jobs,” Ms. Merkel said.

David Jolly reported from Paris. James Kanter contributed reporting from Brussels and Hiroko Tabuchi from Tokyo.

Article source: http://www.nytimes.com/2013/01/09/business/global/daily-euro-zone-watch.html?partner=rss&emc=rss

Siemens Reports a Decline in Profits, Citing Europe’s Debt Crisis

Profit in the last three months of 2011, which is Siemens’s fiscal first quarter, fell to 1.5 billion euros ($1.95 billion), a drop of 17 percent compared to a year earlier. Sales rose 2 percent to 17.9 billion euros. But new orders declined 5 percent to 19.8 billion euros, which augured poorly for future quarters.

“The uncertainties of the ongoing debt crisis have left their mark on the real economy,” Peter Löscher, the chief executive of Siemens, said in a statement. He said he expected a recovery in the second half of the year but added, “We must work hard to achieve our goals.”

The company, based in Munich, reported lower profit in all its major business areas, including a 36 percent decline in its energy unit, which Siemens attributed to delays in major power transmission projects and a loss in the division that makes wind turbines. The energy unit is the largest part of the company by sales.

The German economy has so far weathered the European debt crisis relatively unscathed, because of large exporters like Siemens that have profited from business in China and other countries where growth remains strong.

But the latest earnings report suggested that business from some emerging markets could be slowing. That would be a bad sign for Siemens and other makers of industrial products, which, along with automobiles, account for most of German exports.

Orders from Asia and Australia declined 9 percent in the quarter, Siemens said, and 3 percent for emerging markets over all. Orders from the United States rose 6 percent, the company said.

However, there were also other signs that the looming slowdown in the European economy, and especially Germany, might not be as bad as feared.

A survey of purchasing managers released Tuesday by the data provider Markit Economics showed an unexpected rise in services and manufacturing output in January, led by Germany. Analysts had expected a decline.

The data “adds to tentative evidence suggesting that the downturn in the euro zone may be bottoming out,” the Dutch bank ING said in a note to clients. But, the analysts added, “the underlying economic situation remains very fragile.”

Article source: http://www.nytimes.com/2012/01/25/business/global/europe-debt-crisis-weighs-on-siemens.html?partner=rss&emc=rss