German exports tumble, raising concerns about economic recovery

Written by

Written on Dec 13, 2024

Reading time 2 minutes

German exports fell by 2.8% in October, exceeding analysts’ expectations.
Germany's trade surplus decreased significantly, dropping from 16.9B euros in September to 13.4B euros in Oct.
Exports to EU countries saw a 0.7% drop, while exports to third countries experienced a 5.3% decrease.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

The German economy, long considered a powerhouse of global trade, experienced an unexpected setback in October, with exports declining more than anticipated.

This downturn casts a shadow on hopes for a swift recovery in external demand, signaling a potential delay in the much-anticipated rebound.

According to data released by the federal statistics office on Friday, German exports contracted by a significant 2.8% compared to the preceding month.

This figure surpassed even the most pessimistic forecasts, exceeding the 2% drop predicted by a Reuters poll, underscoring the depth of the slowdown.

Trade surplus shrinks amid global demand weakness

The decline in exports had a direct impact on Germany’s trade balance, which saw a marked contraction in October.

The foreign trade balance recorded a surplus of 13.4 billion euros ($14.02 billion), a notable decrease from the 16.9 billion euro surplus in September and a sharp fall compared to the 18.9 billion euros recorded in October of the previous year.

This shrinking surplus highlights the challenges facing Germany’s export-oriented economy amidst weakening global demand.

The data from the statistics office revealed that exports to EU countries experienced a modest 0.7% decrease, while those to third countries saw a more substantial decline of 5.3%.

US and China lead export declines, UK bucks the trend

Examining the regional breakdown of exports reveals a nuanced picture of Germany’s trade relationships.

While the United States remained the primary destination for German goods in October, exports to the US experienced a sharp decline of 14.2% compared to the previous month.

This significant drop suggests a weakening demand from a key trading partner.

Similarly, exports to China also decreased by 3.8% in the month.

On the other hand, exports to the United Kingdom bucked the trend, witnessing a modest increase of 2.1%.

This geographical variance underscores the complex and evolving nature of global trade dynamics impacting Germany’s export landscape.