Foreign trade: exports grow strongly – pre-crisis level exceeded

German exports have left the Corona low after unexpectedly strong business.

Despite material shortages and delivery bottlenecks, exports exceeded the pre-crisis level of February 2020 (plus 1.1 percent) for the first time since the outbreak of the pandemic, as the Federal Statistical Office announced on Monday. The global economic recovery boosted business and resulted in a sharp rise in imports and exports in the first half of the year.

However, the picture is not clear. The foreign trade association BGA referred to logistic problems with rising freight costs and a lack of predictability for shipping. In addition, there are entry bans in some countries and new bureaucratic hurdles for foreign trade, criticized BGA President Anton Börner.

In June alone, goods “Made in Germany” with a value of 118.7 billion euros were shipped abroad. That was 23.6 percent more than in the same period of the previous year and 1.3 percent more than in May 2021. In a monthly comparison, experts had only expected an average increase of 0.3 percent.

According to the BGA, the export business was boosted primarily by demand from the USA, China and the European Union. In the first half of the year, exports rose by 16.7 percent to 673.1 billion euros compared to the first six months of 2020. During the same period, imports increased by 15.4 percent to 576.4 billion euros.

According to the German Chamber of Commerce and Industry (DIHK), the numbers should not hide the challenges. “Transport problems, especially in shipping and material delivery bottlenecks, are currently leading to disruptions in international supply chains,” said DIHK foreign trade director Volker Treier. Concerns about new waves of corona infections and existing restrictions on business trips also meant that the second half of the year could only be viewed cautiously.

For the year as a whole, the DIHK expects an increase in exports of eight percent. The Corona crisis had torn deep holes in the German export balance last year.

“The strong figures show that the supply chain bottlenecks have not yet affected German exports,” explained ING chief economist Carsten Brzeski. However, that could change.

According to a survey by the economic research institute Ifo, 64 percent of the industrial companies surveyed complain about bottlenecks and problems with pre-deliveries as an obstacle to their production. At the moment, the manufacturers are still serving the demand from their warehouses, “but they are now also noticeably emptying,” said Ifo expert Klaus Wohlrabe. If less is produced due to missing parts, not as much can be exported.

The topic also drives the electrical industry. “Although only a tenth of electrical companies report a lack of orders, material shortages and delivery bottlenecks are now causing difficulties for four out of five companies,” said Andreas Gontermann, chief economist of the ZVEI industry association.

So far, the industry with around 870,000 employees has been recovering at high speed from the corona-related slump of last year. “After incoming orders had shrunk by a tenth due to the pandemic in the first half of 2020, they were able to grow again by more than a quarter in the first half of this year,” reported Gontermann. Orders from abroad rose by 32.2 percent compared to the first half of 2020. Domestic demand rose by 21.3 percent.

Adjusted for price increases, production increased by 12.2 percent in the first six months compared to the same period of the previous year. Sales increased by 12.3 percent to 96.7 billion euros. The ZVEI recently raised its production forecast for the year as a whole from plus five percent to plus eight percent and was confident that it would be able to catch up with last year’s minus of six percent this year.