For the second time in a row, German companies are achieving an increase in exports. However, the mood in important sectors is poor and international competition is becoming tougher.
The prospects for the German economy remain poor despite the second increase in exports in a row. As the Federal Statistical Office announced based on preliminary results, exports in August increased by 1.3 percent to 131.9 billion euros compared to July, seasonally and calendar adjusted. Compared to the same month last year, there was a small increase of 0.1 percent.
However, these slight increases should not be reassuring, explained Dirk Jandura, President of the Federal Association of Wholesale, Foreign Trade and Services. Export growth continues to lag behind global dynamics and there is still a dangerous mix of economic, structural and administrative crises that has the export economy firmly in its grip.
Jandura also pointed to continued low incoming orders for many companies and a poor mood across all sectors. According to a current survey by the VDMA industry association, 37 percent of companies in the important mechanical and plant engineering sector now rate their situation as bad or very bad – six months ago only 26 percent of those surveyed said this. According to a survey by the Ifo Institute in September, the mood in the German chemical industry has also deteriorated further.
Meanwhile, imports to Germany declined in August. With a value of 109.4 billion euros, they were 3.4 percent below the previous month. Compared to August 2023, imports lost 3.1 percent. The foreign trade surplus in August amounted to 22.5 billion euros. In the previous month of July, the German economy recorded the lowest foreign trade surplus since May 2023 at 16.8 billion euros.
Slightly more goods were delivered to the USA, the most important buyer country for the German economy, than in July. Exports there increased by 5.5 percent to 13.5 billion euros after calendar and season adjustments. Exports to China also increased slightly compared to the previous month, by 1.9 percent to 7.4 billion euros. Most imports also came from China with a value of 13.2 billion euros, 1.4 percent less than in July.
Exports are considered the driving force of the German economy. From January to August it was worth around 1.06 quadrillion euros, 0.9 percent below the previous year’s level. According to estimates from leading economic research institutes, German companies are facing increasing competition from high-quality industrial goods from China, which are displacing German exports on world markets. There are also structural problems such as energy prices for many German companies, which are high compared to international standards.
Source: Stern
