A ray of hope for German exporters: In November, exports rose more sharply than at any time since January. Exports grew by 2.1 percent compared to the previous month to a good 127 billion euros, as reported by the Federal Statistical Office. At the same time, imports fell by 3.3 percent to 107.6 billion euros. Exporters had to accept a severe setback in October. There was also good news in industrial production, which rose surprisingly strongly in November.
US business is growing strongly – what is Trump doing?
German export companies recorded growth primarily with countries outside the EU. Most exports went to the USA again in November: after a slump in October, they now rose by 14.5 percent to 14 billion euros.
“However, this substantial increase in exports is likely to be a thorn in Donald Trump’s side; after all, the US’s foreign trade deficits with its most important trading partners should be significantly reduced,” commented Thomas Gitzel, chief economist at VP Bank. Trump, who will move into the White House on January 20th, had threatened high tariffs on imports from the EU.
There were also significant increases in exports to Great Britain (plus 8.6 percent). In contrast, sales to the EU fell by 1.7 percent to 67.8 billion euros and to China (minus 4.2 percent). Since Germany overall exported more than it imported, the foreign trade surplus grew to 19.7 billion euros.
Muted expectations for 2025
German exporters have been struggling with weak business on the world markets for a long time. Despite the increase in November, exports remained 3.5 percent below the level in the same month last year. In the first eleven months, exports totaled almost 1.43 trillion euros, a decrease of 1.4 percent compared to the same period last year.
The foreign trade association BGA spoke of a “lost year”. “The current situation in wholesale and foreign trade is worrying,” said President Dirk Jandura.
In December, companies’ export expectations deteriorated, as the Ifo Institute found. “The German economy is expecting a decline in foreign business.” The metal industry is hardest hit.
Industrial production surprised
There was a glimmer of hope in the midst of the economic crisis in industrial production. In November, after two negative months in a row, production grew by 1.5 percent compared to the previous month. The Federal Statistical Office recorded a big increase in energy production and in “other vehicle construction”, which includes the production of aircraft, ships, trains and military vehicles. The construction industry also grew.
Despite the recent increase, there has been a negative trend since 2018, wrote VP Bank chief economist Gitzel. “Industrial production has fallen by almost 20 percent since then.”
Carsten Brzeski, chief economist at ING Bank, was also cautious about the German economy. “The recent recovery in German industrial production and exports is a welcome relief, but it comes too late to prevent another quarter of stagnation.”
Communication from Destatis
