Dublin : 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 per cent from October, when they decreased 0.1 per cent, the European Union's statistics office in Luxembourg said yesterday. The trade surplus narrowed to 3.9 billion euros (Dh20.57 billion) in November as imports rose 0.3 per cent from October, when they fell 1 per cent. European inflation accelerated to 0.9 per cent in December, a separate report showed.

The euro's 10 per cent 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 on Thursday.

"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 per cent from a year earlier, the statistics office said. Core inflation, excluding volatile costs such as tobacco, food and energy, accelerated to 1.1 per cent in December from 1 per cent in the previous month.

The euro declined against the dollar yesterday as Greece's struggles to cut its budget deficit dented investor confidence in European assets. The 16-nation currency traded at $1.4383 at 11.15am in London, down 0.8 per cent on the day.

The ECB on Thursday left its benchmark interest rate at a record low of 1 per cent and signalled 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. The central bank forecasts growth of about 0.8 per cent this year and around 1.2 per cent in 2011.

European Aeronautic, Defence and Space, the parent of Airbus, on January 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 January 12 that he anticipates economic conditions will remain "challenging" in 2010 after currency swings eroded fourth-quarter revenue.

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. Confidence in the world economy rose in January, a Bloomberg Professional Global Confidence Index showed on January 13.

Euro-area exports to the US, the region's second-biggest trading partner, dropped 20 per cent in the first 10 months of 2009 from a year earlier, yesterday's report showed. Shipments to the UK, the largest market for euro-area goods, declined 24 per cent, while exports to China rose 1 per cent. 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 per cent in November. That's the highest in more than 11 years. Koenig and 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 and Bauer CEO Helge Hansen said on December 4 in Würzburg, Germany.