Good business in the USA and China boosted German exports in February. After growth at the beginning of the year, exporters achieved another plus overall. The German Chamber of Industry and Commerce (DIHK) spoke of a “small ray of hope” in view of the global uncertainties. “However, weakening global demand, high inflation rates and increasing protectionism continue to weigh on German foreign trade,” said DIHK foreign trade expert Carolin Herweg.
According to preliminary data from the Federal Statistical Office, goods worth 136.7 billion euros were exported in February. That was calendar and seasonally adjusted 4.0 percent more than in the previous month, as the Wiesbaden authority announced. Compared to February 2022, an increase of 7.6 percent was recorded. At the beginning of the current year, exports increased by 2.5 percent compared to December 2022, according to the latest data.
“The export business of German industry benefits from the better functioning supply chains and the opening of the Chinese economy,” explained Thomas Gitzel, chief economist at VP Bank, with a view to the lifting of the corona restrictions in the People’s Republic. Compared to the previous month, exports to the important Chinese market rose by 10.2 percent to 8.5 billion euros. In business with the USA – the largest single market for goods “Made in Germany” – German companies posted an increase of 9.4 percent to 14 billion euros.
Certain framework conditions required
The Federal Association of Wholesale, Foreign Trade and Services (BGA) called for the “right” framework conditions to give new impetus to German foreign trade. “Both the strengthening of the location and improved framework conditions for easier and faster diversification of the supply chains are part of this,” said BGA President Dirk Jandura.
In the first two months of the current year, exports increased by 8.4 percent to 268.1 billion euros compared to the same period last year. Last year, German foreign trade achieved a record result, partly 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.
Fewer imports to Germany
Exports to Russia shrank to 0.9 billion euros in February. That was 14.3 percent less than in the previous month and 59.9 percent less than a year earlier. The western community of states reacted with sanctions more than a year ago after the Russian war of aggression in Ukraine. Imports from Russia fell by 67.2 percent to 0.3 billion euros compared to January.
Overall, imports to Germany rose by 4.6 percent compared to the previous month. Compared to the same month last year, growth of 3.8 percent to 120.7 billion euros was recorded.
The mood among German exporters had recently brightened slightly. The index of the Munich Ifo Institute rose from 3.5 to 4.0 points in March compared to February. However, the two key sectors of automobiles and mechanical engineering only expect slight growth. “Export demand still lacks momentum,” said Klaus Wohlrabe, head of Ifo surveys. “The global economy is developing rather cautiously.”
