This is a setback for the German economy. In April, foreign trade was still recording rising exports – which fuelled hopes of an economic recovery.
After a brief glimmer of hope, German foreign trade developed weakly in May. Compared to the previous month of April, the value of exported goods fell by 3.6 percent to 131.6 billion euros, adjusted for calendar and seasonal factors, according to the Federal Statistical Office. Significantly less was exported to China in particular. Imports weakened even more, falling by 6.6 percent to 106.7 billion euros.
The foreign trade surplus thus amounted to 24.9 billion euros in May, compared to 22.2 billion euros in April. Last year, the German export industry had already felt the effects of the weakness of world trade and the consequences of geopolitical crises.
Exporters speak of “dramatic collapse”
The foreign trade association BGA speaks of a dramatic slump that is home-made. “Regulations and reporting obligations are still more important to the German government than promoting exports,” criticizes BGA President Dirk Jandura. The EU Commission, under German leadership, must make the expansion of free trade agreements a priority.
Export slump in China business
Within the EU, exports were still relatively stable, with a decline of 2.5 percent. Exports to the most important single market, the USA, also only fell by 2.9 percent. There was a slump in China, with a decline of 10.2 percent. At the same time, imports from the Middle Kingdom rose by 1.7 percent. Imports from the USA increased by 4.6 percent. In contrast, the German economy imported 8.9 percent less from Europe.
When it comes to exports, there is no sign of a summer fairytale, says Volker Treier of the Association of German Chambers of Industry and Commerce. “The improving global economy is not reaching the German export industry.” The reasons are not only geopolitical uncertainties and trade barriers. High bureaucracy and cost burdens are also eroding companies’ competitiveness. According to VP Bank, however, companies can still live off the order backlog from the Corona period.
Destatis on foreign trade 5/2024
Source: Stern
