Businesses are more confident about foreign trade than they have been since Russia’s war in Ukraine broke out. The USA and China in particular are boosting demand for export goods.
German companies are hoping for better export business and are increasingly looking to the future with optimism. In April, the barometer for their export expectations climbed by 2.8 to 6.9 points, as the Munich ifo Institute announced in its monthly business survey.
Hope for second quarter
According to the researchers, such values were last reached in February 2022. After that, the indicator slipped into the red several times in the course of the Ukraine and energy crisis, from which it only moved up again from November.
“The robust economic development in the USA and the pleasing development in China are increasing the demand for German export goods,” commented the head of the ifo surveys, Klaus Wohlrabe, on the results. After a weak start to the year, exports should grow again in the second quarter, according to Wohlrabe.
Auto industry and chemical industry confident
The automotive industry in particular is experiencing a significant upswing. According to the ifo Institute, your export expectations have risen noticeably. In the case of manufacturers of electronic components, on the other hand, the indicator fell slightly. For electrical equipment, rubber and plastic goods as well as glass and ceramics, positive and negative values are roughly balanced.
Optimism has returned in the chemical industry: the indicator there rose to its highest level since September 2021. Beverage manufacturers also expect significant growth in foreign business. Manufacturers of wood products (except furniture) and printers expect exports to decline. There are also still some concerns in the paper industry, as the ifo Institute emphasized.
Business climate also improved
The survey results for German export companies match the ifo business climate index for April published yesterday. The index climbed from 93.2 points in March to 93.6 points in April. This is the sixth monthly increase in a row. The approximately 9,000 top managers surveyed are also more confident than they have been since the outbreak of the Ukraine war in February 2022.
According to ifo President Clemens Fuest, the rise in the business climate does not yet mean that the German economy is out of the woods this year: “Companies’ concerns are easing, but the economy is lacking momentum,” said Fuest yesterday.
The German Chamber of Industry and Commerce (DIHK) recently warned against overly high expectations of exports, although business with the most important trading partner China should gain momentum after the end of the corona restrictions there. “Weakening global demand, high inflation rates and increasing protectionism continue to weigh on German foreign trade,” says DHIK foreign trade expert Carolin Herweg. German companies continue to see themselves exposed to great international competitive pressure.