German exports surprisingly fell for the second month in a row in October. The reason is the weak economy in Europe. Imports are also shrinking unexpectedly.
The German economy is not gaining momentum: exports fell by 0.2 percent in October after calendar and seasonally adjusted adjustments compared to the previous month to 126.4 billion euros, as the Federal Statistical Office announced. Economists surveyed by the Reuters news agency, on the other hand, had expected an increase of 1.1 percent, after a significant decline of 2.5 percent in September. Compared to the same month last year, exports fell by 8.1 percent.
No export revival
“The export slump continues,” said the head of foreign trade at the German Chamber of Commerce and Industry (DIHK), Volker Treier. In the first ten months, exports were 0.8 percent weaker than in the same period last year and totaled a good 1.3 trillion euros. “The economic slowdown in the EU is particularly hitting the German export industry hard,” said Treier.
Given the weak exports, the likelihood of a sustained economic downturn in Germany is increasing. The pattern of “slight contraction, stagnation and very modest growth” of recent quarters is likely to continue, said VP Bank chief economist Thomas Gitzel. “The weak global economy continues to stand in the way of an export recovery,” emphasized the chief economist at Hauck Aufhäuser Lamp Privatbank AG, Alexander Krüger.
decline in Europe
Goods worth 67.9 billion euros were sold to EU member states in October, a decrease of 2.7 percent compared to the previous month. The USA remained the most important buyer of goods “Made in Germany”. Business with the world’s largest economy grew by 5.7 percent to 13.5 billion euros. Exports to China increased by 1.5 percent to 7.9 billion euros, those to Great Britain rose by 5.6 percent to 6.6 billion euros.
Exports to the Russian Federation fell by 5.0 percent to 0.6 billion euros in October 2023 compared to September 2023, adjusted for calendar and seasonally. Compared to October 2022, when exports to Russia had already declined sharply as a result of the Russian attack on Ukraine, they fell by 40.5 percent.
Mood brightens
Imports unexpectedly fell for the fifth month in a row in October, by 1.2 percent to 108.6 billion euros. Compared to the same month last year, imports fell by 16.3 percent. According to the information, the foreign trade balance closed in October 2023 with a surplus of 17.8 billion euros. In September 2023, the calendar and seasonally adjusted balance of the foreign trade statistics was plus 16.7 billion euros, in October 2022 it was plus 7.8 billion euros.
At least the mood in the German export industry improved in November for the second month in a row, signaling stabilization. The barometer for export expectations rose to minus 3.8 points, from minus 6.3 points in October, as the Munich ifo Institute found in its company survey. This is the highest value in six months.
“The export economy is still unable to develop any dynamics,” said the head of the Ifo surveys, Klaus Wohlrabe. “We still have to take greater part in the economic recovery in many countries.”