German exports and industrial output fell in June, while French industrial output also weakened. Hayley Platt looks at what it might mean for Europe's economic recovery.
A mixed picture from two of Europe's biggest economies. Germany's industrial output unexpectedly fell 1.4 percent in June, after adjustments for inflation. Exports, dropped 1.0% for the same period. And imports declined 0.5 percent. Europe's biggest economy widened its trade surplus to a record 24.0 billion euros. Nonetheless, many remain upbeat about the country's economic outlook. CIBC's Jeremy Stretch. SOUNDBITE: Jeremy Stretch, Head of FX Strategy, CIBC, saying (English): "Clearly the numbers themselves are disappointing but I think you can contrast that with the positive surprise that we saw in the factory orders report in the previous period. And I think you should always be very careful about extrapolating one month's numbers and one month's numbers particularly over the summer period." In France - sales of cars and military equipment were strong. That helped narrow France's trade deficit in June to 2.7 billion euros - its lowest level since mid-2009. However, there was an unexpected weakening of industrial production of 0.1 per cent. SOUNDBITE: Jeremy Stretch, Head of FX Strategy, CIBC, saying (English): "There could well be some signs of some improvement in various industrial sectors and certainly the auto demand that we're seeing the whole of the euro zone should benefit some of those French auto makers as well by consequence but I think there is enough to worry broader policy makers about the French recovery story." Overall the French economy grew a healthy 0.6 percent in the first quarter. But expectations for the second quarter are already more modest - between 0.2 and 0.3 percent.