Exports from Germany fell for the second consecutive month in March as the global slowdown and rise of the euro continued to weigh on orders. Sales abroad, adjusted for working days and seasonal changes, declined 0.5 percent from February, when they when they were down 0.2 percent, the Federal Statistics Office said today. The rate of increase in Gernam exports has now been slowing steadily since the last quarter of 2006.
The trade surplus narrowed to 16.7 billion euros ($26 billion) from 16.9 billion euros in February. The surplus in the current account, which gives perhaps the best measure of all exports including services, widened to 17.2 billion euros from 16.1 billion euros the previous month.
The German economy is expected by Germany's leading economic institutes to expand 1.8 percent this year and 1.4 percent in 2009, but these numbers are now looking very questionable, given the extent to which German GDP growth is dependent on exports. These forecasts are already a downward revision since they had previously forecast growth of 2.2 percent for this year. The global outlook is certainly not encouraging for the idea of a sudden "bounce back" in German exports and International Monetary Fund last month cut its 2008 global growth forecast and said the world economy faces a 25 percent chance of recession.
The euro has appreciated 14 percent appreciation against the dollar over the past year and reached a record $1.60 on April 22. At the same time, surging raw-material costs are eroding spending power. Crude oil prices have doubled in the past year and breached $120 a barrel for the first time this week.
German manufacturing growth also slowed last month, business confidence fell and factory orders dropped for a fourth month in March. Investors also became more pessimistic in April. Plant and machinery orders fell 5 percent in March from a year earlier, according to the VDMA machine makers association.
German industrial production declined 0.5 percent in March from February, when it rose a revised 0.2 percent, according to the Economy Ministry earlier today.
German exports to other European Union countries dropped 1.5 percent in March from a year earlier, they rose 3.5 percent to non EU countries (including, of course, Russia and Ukraine).
Germany exported goods to the value of EUR 84.0 billion and imported goods to the value of EUR 67.3 billion in March 2008. German exports of March 2008 were thus 0.2% and imports 3.3% above the respective March 2007 levels. Upon calendar and seasonal adjustment, exports and imports showed opposite month-on-month trends: Exports decreased by 0.5%, while imports increased by 0.8% on February 2008.
The foreign trade balance showed a surplus of EUR 16.7 billion in March 2008. In March 2007, the surplus amounted to EUR 18.7 billion. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR 15.4 billion in March 2008.
According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 17.2 billion in March 2008, which included the balance of services (EUR –0.7 billion), factor income (net) (EUR +5.0 billion), current transfers (EUR –3.1 billion) and supplementary trade items (EUR –0.7 billion). In March 2007, the German current account showed a surplus of EUR 20.7 billion.
In March 2008, Germany dispatched commodities to the value of EUR 54.8 billion to the Member States of the European Union, while it received commodities to the value of EUR 44.1 billion from those countries. Compared with March 2007, dispatches to the EU countries thus decreased by 1.5%, while arrivals from those countries rose by 1.8%. Commodities to the value of EUR 36.3 billion (–2.7%) were dispatched to the euro area countries in March 2008, while the value of commodities received from those countries was EUR 30.4 billion (+0.2%). Commodities to the value of EUR 18.5 billion (+0.8%) were dispatched to EU countries not belonging to the euro area in March 2008, while the value of the commodities which arrived from those countries was EUR 13.7 billion (+5.5%).
Germany exported commodities to the value of EUR 29.2 billion to and imported commodities to the value of EUR 23.2 billion from countries outside the European Union (third countries) in March 2008. Compared with March 2007, exports to third countries were up by 3.5% and imports from those countries by 6.3%.