Despite a dip in March, Germany’s export companies ended the first quarter with a plus. From January up to and including March, goods “Made in Germany” with a total value of 398.2 billion euros were delivered abroad, as reported by the Federal Statistical Office.
According to calculations by the Wiesbaden authority, that was 7.4 percent more than in the same period last year. According to the German Chamber of Industry and Commerce (DIHK), however, the prospects are subdued.
“Geopolitical risks, repeated turbulences on the financial markets, the persistently high inflation rates and loss of purchasing power as well as increased interest rates are causing great uncertainty in the foreign business of German companies,” explained Volker Treier, DIHK foreign trade chief. “The weakening world economy is noticeably gnawing at German exports.” Adjusted for price increases, the DIHK expects exports to increase by just one percent in the current year. “An upswing looks different,” said Treier.
Export minus in the USA and China
In March, exports at 129.7 billion euros were 5.2 percent lower than in February of the current year, but 5.0 percent higher than in March 2022. There were declines compared to the previous month in business with the countries of the European Union, among others Union (EU) (minus 6.2 percent). The drop in exports was particularly clear in the two most important individual markets for “Made in Germany”, the USA (minus 10.9 percent) and China (minus 9.3 percent).
“This shows once again that the global economic engine is sputtering and that the German economy is stumbling as a result,” explained Thomas Gitzel, Chief Economist at VP Bank. Most recently, companies exported more goods thanks to better-functioning supply chains. “This effect seems to be fading now.” According to preliminary data from the statisticians, exports still supported the German economy overall in the first three months of the current year.
The Federal Association of Wholesale, Foreign Trade and Services (BGA) attributed the development in the USA primarily to increased inflation. “After the US population has spent the assets saved during the corona pandemic, people are starting to save more again due to inflation and thus spend less on consumer products from overseas,” explained BGA President Dirk Jandura.
Imports also fell
There were also signs of a slowdown in goods imports in March. Imports fell by 5.5 percent year-on-year to EUR 113.0 billion. In the first quarter, however, an increase of 1.6 percent to 349.5 billion euros was recorded compared to the same period last year.
In 2022 as a whole, German foreign trade achieved a record result, also due to price increases, some of which were significant. These drove up the value of both exports and imports. The effects cannot be quantified precisely because the statisticians do not collect price-adjusted data on foreign trade.
