Following the disappointing information revealed last week about industrial and consumption data, trade data for the month of October just went out, keeping up the hope that Germany’s national economy would be able to avoid a contraction for the final quarter of 2019.
The news has brought in some welcome relief to the heavily stressed economy. Simultaneously, the unexpected increase of exports has also been puzzling, as it has gone contrary to the trend of a worldwide slowdown.
German exports rose by 1.2 per cent in October, on a month on month basis, from 1.5 per cent of September. In the past 10 months, exports have risen for 7 months. Further the average figures for export increases have gone up by 0.1 per cent month on month for 2019. On the other hand import figures remained unchanged during this period, as trade balance expanded to 21.5 billion euros, from the September figure of 21.2 billion euros.
Lack of New Orders Continues to be Major Concern
In spite of the ongoing trade disputes and global slowdown of the economy, exports from Germany have managed to keep at a healthy level in recent months. According to data on bilateral trades, Germany’s exports to the United States and China have witnessed increases in comparison to figures from 2018. The trade surplus with the United States has widened.
At the same time, exports to Italy and the United Kingdom have started to decline. Further, the current shortage of new orders is a key concern that is holding back optimism in the industry. At present export orders are approximately equal to that of 2010, just after the financial crisis.
The decline since the summer of 2018 is sharper than the figures of 2011-2012, and have primarily been driven by the falling demand from other countries within the Euro bloc, while exports to countries out of the Euro zone continues to rise.
The latest trade data is the first positive information about the final quarter of 2019. The national economy is expected to continue fluctuating with periods of stagnation, contraction, and poor growth.
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