Despite the recent weakening of the economy, the German economy set an export record last year. Goods with a total value of a good 1564 billion euros were delivered abroad last year, as reported by the Federal Statistical Office on Thursday using calendar and seasonally adjusted data. This exceeded the record for 2021 of a good 1,368 billion euros for goods “Made in Germany” by 14.3 percent.
The increase can also be explained by the significant price increases in recent months. These drove up the value of both exports and imports. The effects cannot be precisely quantified, since the Wiesbaden statisticians do not collect price-adjusted data on foreign trade.
Imports to Germany rose even more strongly than exports due to the high energy prices in 2022 as a whole: At 1488.1 billion euros, imports were 24.3 percent above the previous year’s value. This results in a falling export surplus for the fifth year in a row, this time at 76 billion euros. Last year the balance was around 100 billion euros higher.
Numbers could be deceptive
“The export balance for the year is not as good as it seems,” warned the Federation of German Industries. Adjusted for prices, German exports developed two percentage points weaker than global trade last year. “The export country Germany lost world market share and competitiveness last year,” explained BDI General Manager Tanja Gönner.
Exports to the euro zone rose particularly strongly by 15.1 percent. Goods worth 14.9 billion euros were still delivered to the Russian Federation despite numerous boycott measures. That was a decrease of 43.7 percent compared to the previous year. In terms of value, imports from Russia even increased by 6.5 percent to 35.3 billion euros.
The year 2022 ended weakly for German foreign trade: compared to the previous month, exports fell by 6.3 percent and imports fell by 6.1 percent. Among other things, sales in important customer markets such as the USA and China weakened.
Ifo sees problems in mechanical engineering
At the beginning of the current year, Germany’s exporters are hoping for new impetus. According to the Ifo Institute, the mood among exporters continued to improve in January. The auto and chemical industries, among others, expect higher exports. The Munich Economic Research Institute surveys a good 2,300 industrial companies every month about their export expectations.
The Ifo Institute believes that mechanical engineering is not capable of dynamic growth. The industry reported on Thursday of a slump in orders in the final quarter of 2022. In the annual balance sheet, the price-adjusted order intake was ultimately four percent below the previous year’s value, as the industry association VDMA announced on Thursday in Frankfurt. Domestic orders fell by five percent, while orders from abroad fell by four percent.
According to earlier information, the VDMA expects a slight real decline in production of two percent for the current year. Because the environment for the export-oriented German key industry with more than one million employees remains challenging: Growth in the important sales market China is weakening, the war in Ukraine is keeping energy prices at a high level, general inflation will only fall slowly according to economists and the Interest rate hikes by central banks make investments more expensive.
