The global economy is weakening, wars are causing uncertainty. Germany’s export companies are feeling this.
The sluggish global economy and geopolitical conflicts are putting a strain on the business of German export companies. According to the Federal Statistical Office, exports of goods “Made in Germany” fell in September compared to both the previous month and the same month last year.
“German foreign trade is suffering. The economic difficulties are putting a strain on companies and creating a bad mood,” said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura, on Friday.
According to statisticians, Germany exported goods worth 126.5 billion euros in September. That was 7.5 percent less than in September 2022. As of August 2023 there was a decrease of 2.4 percent. The export balance for the first nine months was better thanks to a positive start to the year: the value of exported goods rose slightly by 0.1 percent to 1,177.8 billion euros within the year.
Jandura cited “the aftermath of the energy price crisis, the ECB’s need to combat inflation and the weakness of our most important economic partners – globally and in the domestic market” as reasons for the weakening foreign trade for some time. In addition, geopolitical conflicts increased uncertainty, especially the war in Ukraine and the Middle East conflict. “This causes reluctance to make purchasing and investment decisions,” explained the BGA President.
Brake instead of growth engine
Exports are an important pillar of the German economy. According to ING chief economist Carsten Brzeski, trade is no longer the strong, resilient growth engine it once was, but rather a brake.
Exports to the USA and China – the two most important individual markets for German-made goods – fell significantly in September. Exports to the United States fell by 4.0 percent to 12.8 billion euros compared to the previous month, calendar and seasonally adjusted. Trade with China fell by 7.3 percent to 7.7 billion euros. The largest sales region is the European Union. Here exports fell by 2.1 percent to 69.8 billion euros.
Imports fell even more sharply than overall exports within a year in September, falling by 16.6 percent to 110.0 billion euros.
Last year, German foreign trade achieved record results, partly due to significant price increases. However, the effects cannot be quantified precisely because statisticians do not collect price-adjusted data on foreign trade.