German Exports on the Up

​German exports continue to recover but at a slower pace, however, supply cjhain issues could lead to more volatility in the months ahead. Exports (seasonally and calendar adjusted) increased by 0.3% month-on-month in May, from 0.3% in April making it the thirteenth consecutive increase.

Year on year, exports were up by more than 36% and have now almost returned to pre-crisis levels. The German export sector benefits from the continuing recovery the U.S. and China. In the first half of the year, the US remained the single most important export destination while China became the second most important destination, taking over from France.

The role of China is changing and this is reflected by the fact that for the first time ever, Chinese manufacturing exports exceeded Germany’s. China is clearly a top export destination for German manufacturers but has also become a formiddable competitor in global markets.

Brexit has also left its mark on German trade as the UK has dropped out of the five most important trading partners list with German companies. Germany exported more to Austria than to the UK in the first half of the year.

The outlook is mainly positive as the recovery gains momentum and the order books are filling up nicely, however, there are headwinds with supply chain issues that could lead to more delivery problems and consequently, this may have an impact on the export data in the months ahead.