Euro area posts unexpected trade surplus in September

Eurostat, the EU's statistics office, said the eurozone posted a surplus of euro3.7 billion ($5.5 billion) in September, in sharp contrast to analysts' expectations for a deficit of euro2 billion.

The statistics office also said things weren't quite so bad in August as previously thought, revising down its trade deficit for the month to euro2.3 billion from the original estimate of euro4 billion.

Analysts said the figures provided further evidence that the end of the recession in the eurozone in the third quarter of the year was largely due to a pickup in exports as opposed to a rebound in consumer spending.

"The recent improving trend in the eurozone's net trade performance reinforces belief that it was a significant factor in the region's return to growth in the third quarter, and September's trade data boosts hopes that it can contribute further in the fourth quarter," said Howard Archer, chief European economist at IHS Global Insight.

Figures last week showed that the eurozone joined the United States and Japan out of recession by growing by 0.4 percent in the third quarter from the previous three month period.

The figures also show that the eurozone countries appear to be coping with the higher euro, which rose to a 15-month high of $1.5061 in October and makes their exports more expensive and less competitive abroad.

"There is little sign as yet that it is damaging the export recovery, suggesting that exporters may have been reducing margins to maintain sales but firms cannot reduce profits indefinitely," said Ben May, European economist at Capital Economics.

"Nonetheless, with the U.S. and Asian economies set to grow at a reasonably healthy clip in the near term at least, we doubt that these headwinds will be enough to stop the export recovery in its tracks," he added.

Despite the improvements, the scale of the recession remains evident in the figures, with both exports and imports down 18 percent and 24 percent respectively in September from the year before.

For the 27-nation EU as a whole, which includes non-euro members like Britain and Sweden, the trade deficit narrowed to euro11.2 billion in September from euro12 billion the month before.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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