All about business

European exports declined for a second month in November as the euro’s strength made goods from the region more expensive abroad.

Exports from the euro area dropped a seasonally adjusted 0.4 percent from October, when they decreased 0.1 percent, the European Union’s statistics office in Luxembourg said today. The trade surplus narrowed to 3.9 billion euros ($5.6 billion) in November as imports rose 0.3 percent from October, when they fell 1 percent. European inflation accelerated to 0.9 percent in December, a separate report showed.

The euro’s 10 percent advance against the dollar in the past year is threatening to undermine the region’s recovery by making exports less competitive. While European services and manufacturing industries expanded at the fastest pace in more than two years in December, the economy still faces a “bumpy road” ahead, European Central Bank President Jean-Claude Trichet said yesterday.

“The exports-driven recovery of the preceding two quarters is fading,” said Dominique Barbet, an economist at BNP Paribas SA in Paris. “Imports’ lack of dynamism suggests lackluster domestic demand.”

December inflation was the fastest since February 2009, with energy prices rising 1.8 percent from a year earlier, the statistics office said. Core inflation, excluding volatile costs such as tobacco, food and energy, accelerated to 1.1 percent in December from 1 percent in the previous month.

Greece’s Struggles

The euro fell the most in almost a month against the dollar today as Greece’s struggles to cut its budget deficit dented investor confidence in European assets. The 16-nation currency traded at $1.4366 at 3:43 p.m. in London, down 0.9 percent on the day.

The ECB yesterday left its benchmark interest rate at a record low of 1 percent and signaled that officials will wait for more signs of recovery before withdrawing emergency measures further, with Trichet citing “a great level of uncertainty” surrounding the economic outlook short term personal loans. The central bank forecasts growth of about 0.8 percent this year and around 1.2 percent in 2011.

European Aeronautic, Defence & Space & Co., the parent of Airbus SAS, on Jan. 12 reported its steepest annual revenue drop since the company went public a decade ago, partly because of a weaker dollar. Eckhard Cordes, chief executive officer of Metro AG, Germany’s biggest retailer, said on Jan. 12 that he anticipates economic conditions will remain “challenging” in 2010 after currency swings eroded fourth-quarter revenue.

Biggest Economy

Economies around the globe are emerging from the worst recession in six decades, led by China, where exports gained for the first time in 14 months in December. The Asian nation overtook Germany as the largest exporter of goods in 2009. Industrial output in the U.S., the world’s biggest economy, rose in December for a sixth month, data showed today.

Euro-area exports to the U.S., the region’s second-biggest trading partner, dropped 20 percent in the first 10 months of 2009 from a year earlier, today’s report showed. Shipments to the U.K., the largest market for euro-area goods, declined 24 percent, while exports to China rose 1 percent. The detailed country data are published with a one-month lag.

To help shore up earnings, companies have been cutting costs and paring wages. European unemployment rose to 10 percent in November. That’s the highest in more than 11 years. Koenig & Bauer AG, the world’s third-biggest printing-press maker, said last month that it plans to eliminate more jobs.

“China and other emerging countries bring in volume but not necessarily profit,” Koenig & Bauer CEO Helge Hansen said on Dec. 4 in Wuerzburg, Germany. “They help retain jobs, but they don’t help in terms of a positive balance.”

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