Euro Crisis Hits German Exports......The German economy has seemed surprisingly resistant to the ill effects of Europe's financial crisis. But an April drop in exports suggests that Europe's largest economy may not be immune after all.

For much of 2010 and 2011, the German economy seemed immune to the euro crisis raging around it. Now, however, it looks as though those days are over. Several indicators show that dark clouds are gathering over the country's economic output. The latest of those came on Friday.

According to data released on Friday by Germany's Federal Statistical Office, exports fell by 1.7 percent in April in comparison with March. The fall, while expected, was twice what most economists had forecast. It marks the first time in 2012 that German exports have fallen. In total, Germany exported €81.7 billion ($102 billion) worth of goods in April.

The data revealed that Germany can no longer count on the strength of growth in developing countries to offset the euro crisis. Exports to euro-zone countries mired in debt crises fell by 3.6 percent in April. Even though exports to non-European countries actually grew 10.3 percent in the month, demand from China and India has slowed, and German companies are worried.

"German companies have the feeling that foreign demand is not as dynamic as before and that the global economy is entering a weak phase," Dekabank economist Andreas Scheuerle told the conservative daily Die Welt. Still, he added, the main problem was more local. "The weakness is coming from the euro zone, where the debt crisis is not only taking the form of budget plans and savings programs, but it is also creating more uncertainty about the economic situation that's being reflected in weaker investment."

Sources of Worry

German domestic demand has also reflected that uncertainty. The Federal Statistical Office also showed that imports fell to their lowest levels in two years, dropping 4.8 percent in April. Germans imported €72.7 billion ($91 billion) worth of goods in April, 1 percent less than in April 2011. Analysts are expecting exports to remain weak in the coming months.

Other indicators have also proven sources of worry in recent days. Germany's blue chip stock index, the DAX, has had an extremely rough two weeks as the situation in Spain continues to unsettle investors. In May, the Ifo business climate index, one of the country's leading economic pulse checks, fell for the first time in half a year. The German automobile industry registered a 13 percent drop in exports in May against the same month in 2011.

Despite the warning signs, Germany's economy still remains the strongest in Europe. Even with the drop, exports in April were 3.4 percent higher than the same month last year. German exports are also positive overall this year, up 5.2 percent in the first four months of the year over the same period last year.