German exports contract sharply in August

Sales of German goods overseas dropped by 5.8% in August in seasonally adjusted terms, according to the Federal Statistics Office.

That led to a sharp reduction in the country’s trade surplus, to €14.1bn, from a revised €23.5bn in the previous month.

Nevertheless, the reduction in exports was largely due to “an unusual pattern of factory closures”, analysts at Berenberg pointed out.

Imports also fell, by 1.3% month-on-month, as uncertainty over the outcome of events in Ukraine weighs on firms’ investment decisions.

“As that uncertainty fades, a fundamentally sound German economy should rebound quickly. We expect a return to significant growth in early 2015,” the broker added.