exceeded expectations
German exports are growing surprisingly strong
3/3/2023 9:32 am
German exports rose sharply in January by 2.1 percent compared to the previous month, exceeding economists’ expectations. There is also a surprise when it comes to imports: They are falling significantly, although growth was expected.
German exporters got off to a surprisingly good start to the year, also thanks to strong demand from their most important customer, the USA. According to the Federal Statistical Office, their exports grew by 2.1 percent in January compared to the previous month. Economists had only expected an increase of 1.5 percent. Imports, on the other hand, fell by 3.4 percent and thus for the fifth month in a row. One percent growth was expected here.
“The export sector is alive – even if the growth is too small to compensate for the decline in December,” said the chief economist at Hauck Aufhäuser Lampe Privatbank AG, Alexander Krüger. “Material bottlenecks are decreasing and many companies’ export expectations have increased.” Potential lies dormant in the automotive industry and in exports to China, where the economy is brightening up noticeably after the end of the tough corona policy.
The USA remained the number one buyer country: Goods worth 12.7 billion euros were sold there, an increase of 3.1 percent. Exports to China increased by 1.4 percent to 7.7 billion euros, those to Great Britain even by 7.8 percent to 6.1 billion euros. Exports to the EU countries increased in January by 0.7 percent compared to the previous month.
Exports to the Russian Federation grew by 12.3 percent, but were 60 percent lower than in January 2022, the month before the start of the Ukraine war and subsequent sanctions against Russia. The most important German export goods to Russia are pharmaceutical products, as the health sector has been exempted from western sanctions. Imports from Russia, on the other hand, fell by 36.7 percent within a month.
Weak global demand dampens hopes
Sentiment among German exporters deteriorated slightly in February. The barometer for company expectations fell to 3.8 points from 4.1 points in January, according to the Munich IFO Institute in its monthly survey. “Weak world demand is dampening hopes for German exports,” said IFO President Clemens Fuest.
The federal government expects a difficult year for German exporters. Exports are likely to grow by just 2.2 percent in 2023, according to the annual economic report. The “subdued development of the world economy” is initially dampening the prospects of German exporters on the international sales markets.