German companies exported goods worth 127.7 billion euros in June, which is 3.4 percent less than in May, the Federal Statistical Office reported. Analysts had expected a decline in this area, but only by 1.5 percent. After a temporary increase in exports in April, this is the second monthly decline in a row.
Imports to Germany rose by 0.3 percent in June to €107.3 billion. This translates into a foreign trade surplus of €20.4 billion (after €25.3 billion in May).
Sharp decline in trade with the US
The declines were particularly severe for those German exporters whose largest recipient is the US. The value of goods sold there fell by 7.7% in a month to €12.9 billion. In turn, exports to China rose by 3.4% (to €7.9 billion). At the same time, Germany imported goods worth €12.3 billion from there.
German exports to other EU countries fell by 3.4% (to EUR 69.7 billion).
China is ceasing to be Germany's largest trading partner this year, says Max Butek from the board of the German Chamber of Commerce in Eastern China. Year by year, exports to China are falling, while imports from there are growing slightly. “Companies are not yet experiencing a revival. We cannot speak of sustainable growth,” says Butek.
Germany's Exports: Gloomy Forecasts
In the year-on-year comparison to June 2023, German exports fell by 4.4 percent, and imports by as much as 6.4 percent. The BGA foreign trade association sees the reasons mainly in weak global demand and the weakened competitiveness of the German economy. Experts have been talking about this for months. The German economic model must be strengthened, says BGA President Dirk Jandura. He expects the government to implement a policy to strengthen technology and digital infrastructure: “In addition, bureaucracy must be reduced and access to foreign capital must be facilitated,” he states.
Commerzbank Chief Economist Jörg Krämer is also concerned about the development of the situation. He is not convinced by the slight recovery (by 1.4%) in industrial production in Germany in June. “German industrial production has only half caught up with the collapse from a month ago. That says a lot. And the weakness of leading indicators does not suggest a strong recovery in industrial activity in the coming months. This is nothing more than a limp movement,” he sums up.
Industrial stagnation affects other industries
Analyst Jens-Oliver Niklasch from the Baden-Württemberg Landbank points to a long-standing problem with orders: “These exports are the result of weak orders recently. This trend will continue in the coming months. The conditions for the German export industry remain difficult,” he says.
Data from entrepreneurs does indeed show a problem with orders. In the latest survey by the Ifo economic analysis institute, over 39 percent of companies indicated that they had a shortage of orders in July. In April, the figure was 38 percent. This applies to all key industries: in the metal and electrical industry, half of companies complain about a shortage of orders, in the automotive industry – 43 percent, in the chemical industry – 40 percent. Due to the weak economic situation in industry, there is also a shortage of orders in logistics and the advertising industry, where every second company complains about this, reports Ifo. (DPA/Mar)
The article comes from the website German Welle