German workers package vinyl records bound for the supply chain Adam Berry, Getty Images

GLOBAL ROUNDUP: German Exports Plunge, Fueling Slowdown Fears

German exports drop 2.6% in July, which covers the first few weeks of Brexit and fuels fears of pumping the brakes. ... Chinese auto sales, meanwhile, are rocketing, up 24.2% year-over-year.

FRANKFURT, Germany — German exports fell sharply in July as demand weakened from outside the euro area, official data showed Friday, adding to a gloomy picture of slowing growth for the EU’s economic powerhouse.

Compared to June, exports dropped by 2.6% to 97.1 billion euros ($108.88 billion) in seasonally-adjusted terms, the federal statistics office Destatis calculated, marking the biggest monthly fall since August 2015. Sales to countries outside the European Union such as China and the United States suffered the most, while there was also a steep fall in demand from non-eurozone EU countries, which include Britain.

The July figures cover the first few weeks after Britain’s shock vote to leave the bloc, fueling fears that the seismic event could put the brakes on trade with Germany’s third-largest export market.

“Either the entire industry took an early and long summer break, or Brexit and a general weakness in Germany’s main export partners left another mark on the economy,” said Carsten Brzeski, chief economist at ING-Diba.

Destatis said it would release Germany’s trade figures with Britain later this month.

Germany’s overall imports — a measure of domestic demand — were also down in July to 77.7 billion euros ($87.13 billion), a drop of 0.7%. Taken together that means that Germany’s trade surplus shrank to 19.4 billion euros ($21.75 billion) from 21.7 billion euros ($24.33 billion) in June, the statisticians said. 

The figures are the latest in a series of disappointing data for the German economy, after production took a surprise tumble in July while demand for industrial orders showed only a slight increase.

Germany’s Bundesbank expects the economy to grow by 1.7% this year and 1.4% in 2017, according to forecasts released before the Brexit referendum.

China Auto Sales Up 24.2% in August

SHANGHAI — Auto sales in China, the world’s biggest car market and a crucial spot for worldwide manufacturers, grew at a faster rate in August, according to data released Friday by an industry group.

Sales reached 2.07 million units in August, up 24.2% year-on-year, the China Association of Automobile Manufacturers (CAAM) said. Both growth and total sales surpassed July, when vehicles sales rose 23% to 1.85 million units.

Auto sales growth has accelerated for the last four months in China as the economy shows signs of stabilising.

An official measure of manufacturing activity rebounded to its strongest level in nearly two years last month while China’s producer prices fell at their slowest rate for more than four years. Sales of passenger cars with engines smaller than 1.6 liters, which accounts for more than 70% of total auto sales, jumped 40.7% to 1.29 million, CAAM data showed.

The government slashed the purchase tax on passenger cars with small engines last October.

Some foreign manufacturers saw their Chinese sales surge last month, with General Motors selling 293,537 vehicles, up 18% year-on-year, and Ford’s sales jumping 22% to 96,450 units.

Copyright Agence France-Presse, 2016

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