German exports and imports edged up in July and industrial output rose unexpectedly, showing sustained resilience in Europe’s largest economy to the eurozone crisis, but economists expect to see increased signs that business is now flagging.

Data from the Federal Statistics Office showed exports and imports from Europe‘s growth engine inched up a seasonally adjusted 0.5 per cent and imports gained 0.9 per cent in July, boosting expectations that domestic demand will carry the German economy through the debt crisis and a global slowdown in demand.

Separate figures released on Friday showed industrial production climbed by a better-than-expected 1.3 per cent on the month in July as factories churned out more durable and capital goods, while construction activity also increased.

“That is a good start to the third quarter. There are no signs of an economic crisis or a serious recession,” said Holger Sandte at WestLB Mellon.

“Germany is still in relatively good shape but gross domestic product could nonetheless shrink slightly in the summer. We expect it to go down by 0.2 per cent,” he added.

Recent data has painted a mixed picture of the German economy, which has proved fairly robust through much of the eurozone’s three-year-old debt and financial crisis.

Economic growth slowed to 0.3 per cent in the second quarter and many economists predict a contraction for the third and possibly the fourth quarters.

But Friday’s trade figures show the bloc’s dominant economy is buying more goods from struggling euro zone countries desperate to offset their own austerity measures.

A breakdown of data showed that imports from the eurozone rose 6.7 per cent on the year in July, compared with a more subdued 1.9 per cent overall year-on-year rise.

Exports to the eurozone also rose, up 3.2 per cent on the year, although they jumped 15.9 per cent to countries beyond Europe, suggesting there is still strong demand for German products.

Data on Thursday had shown industrial orders edging up in July, with the Economy Ministry saying contracts from the eurozone, where Germany sends around 40 per cent of its exports, appeared to have stabilised. But economists said the rise in orders was a technical rebound after June’s weak figures.

“Industrial orders remain stable this year to date. While sentiment is subdued, surveys suggest it has slightly improved again and this points to industrial production remaining robust,” the Economy Ministry said on Friday.

The output data for June was revised upwards to a fall of 0.4 per cent from a previously reported drop of 0.9 per cent, but economists pointed to weak spots in the outlook.

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