Foreign trade - German exports weaken in May
After a brief glimmer of hope, German foreign trade developed weakly in May. Adjusted for calendar and seasonal effects, the value of exported goods decreased by 3.6 percent to 131.6 billion Euro, as reported by the Federal Statistical Office. Exports to China in particular were significantly reduced. Imports shrank by 6.6 percent to 106.7 billion Euro.
The trade surplus amounted to 24.9 billion Euro in May, down from 22.2 billion Euro in April. The German export industry had already felt the weakness of global trade and the consequences of geopolitical crises in the previous year.
Export industry criticizes lack of export promotion
The Foreign Trade Association (BGA) speaks of a dramatic decline. BGA President Dirk Jandura criticizes: "Regulations and reporting requirements are still more important to the German government than export promotion." The EU Commission should prioritize the expansion of free trade agreements under German leadership.
Export decline for China business
Within the EU, exports decreased by 2.5 percent relatively stable. Exports to the United States only decreased by 2.9 percent. However, there was a decline in exports to China with a decrease of 10.2 percent. Simultaneously, imports from China increased by 1.7 percent. Imports from the United States rose by 4.6 percent. However, the German economy imported 8.9 percent less from Europe.
Volker Treier of the German Industry and Trade Association states: "There is no summer fairy tale recognizable in exports." "The attractive global economic upturn is not reaching the German export industry." Reasons are not only geopolitical uncertainties and trade barriers. High bureaucracy and costs also undermined the competitiveness of companies. According to VP Bank's assessment, companies can still draw on the order backlog from the Corona period.
Source: Destatis, Foreign Trade 5/2024
The previous month's foreign trade showed a faint sign of recovery, but it faded rapidly in May, as indicated by Destatis. Dirk Jandura, the BGA's President, expressed concern over the situation, stating that the German government prioritizes regulations and reporting requirements over export promotion. The economic situation in Wiesbaden was also affected, with exports to China significantly decreasing, contributing to the overall weakened foreign trade scenario. Despite relatively stable exports within the EU, there was a notable decline in exports to China, which contrarily saw an increase in imports by 1.7%.
