Foreign trade
Taled sole reached? First economic data give hope
The new year begins with a minus for the German export industry. Growing trade conflicts make the situation more difficult. But there is also some light in the cloudy January balance.
The export nation Germany continues to wait for the upswing. A surprisingly strong industrial production and stable foreign orders for domestic mechanical engineers in January make some hope. However, this is overlaid by a weak foreign trade balance and the prospect of further brake blocks for “Made in Germany” due to increasing trade conflicts and higher customs barriers.
“The German export industry is in free fall,” commented the President of the Federal Association of Wholesale, Foreign Trade, Services (BGA), Dirk Jandura. “After an already historically bad start of the year, the numbers are still falling. In our sector there is no dynamic and impulses in our sector.” Like other associations, the BGA hopes that a new federal government will bring Germany to the business location again.
Decline of exports at the beginning of the year
For January there is a minus in the export balance in comparison to December and compared to the same month of the previous year, as can be seen from the latest figures in the Federal Statistical Office. Local manufacturers delivered in the first month of 2025 with a total value of 129.2 billion euros abroad. According to the Wiesbaden statisticians, these were 2.5 percent less than in December and 0.1 percent less than a year earlier.
Germany’s exporter had completed the year as a whole in 2024 with a minus in December. According to the latest information from the Federal Statistical Office last year, Germany exported a total value of 1,556 billion euros and thus 1.2 percent less than a year earlier.
In the meantime, imports to Germany increased to 113.1 billion euros in January, as can be seen from the preliminary figures of the Federal Statistical Office. This is an increase compared to the previous month (plus 1.2 percent) and at the same month (plus 8.7 percent).
Growing trade conflicts as a danger
China’s aggressive industrial policy is just as much reluctant to the export industry, as well as increasing trade conflicts with the government of US President Donald Trump. Lola Machleid from the German Chamber of Commerce and Industry (DIHK) points out that the effects of US trade policy have not yet been recorded in the Federal Statistical Office. It is “feared that the United States will be the most important export market in the future”.
In general, only a few industries expect rising sales in the coming months, as the latest survey by the IFO Institute showed exporter expectations. Among them is the furniture and beverage industry. The manufacturers of electrical equipment also carefully look at the next three months.
Otherwise pessimism predominates. “The export industry lacks dynamics and spirit of optimism,” summarizes Klaus Wohlrabe, head of the Ifo surveys. “The domestic companies are still waiting for an increase in demand from abroad.”
Slime of hope in mechanical engineering
In Germany’s mechanical and plant builders, foreign business saved the January balance, especially with the Euro partners. All in all, the export -oriented industry with more than one million employees in the new orders missed the result of the previous year’s month only by two percent.
“Once again, the foreign orders were stabilizing,” the Association of German Machine and Plant Construction (VDMA) ordered. Overall, orders in abroad stagnated, while the order volume from Germany remained six percent below the previous year’s result.
Industry surprised in January
With an unexpectedly gratifying plus, 2025 began for German industrial production – also because the auto industry was able to catch up: in January, the manufacture in the company of the processing trade increased by 2.0 percent in the month comparison. This is the strongest increase in production since last August.
According to Ing chief host Carsten Brzeski, this data from the Federal Statistical Office confirm “that the valley sole of the German industrial economy is achieved”. “However, it is still too early to speak of a fundamental turnaround,” says Brzeski.
Michael Herzum, Head of Economics at the Union Investment fund company, expects a slight increase in industrial production for the coming months: it believes that the feeling of spring will also stop if US President Trump takes care of his customs policy in between.
dpa
Source: Stern
