German exports suffer biggest fall since 2009
May figures show 2.4% decline but private consumption helping to support economy
German exports had their biggest fall since late 2009 in May. Photograph: Reuters.
German exports had their biggest fall since late 2009 in May while imports rose far more than expected, in a sign that Europe’s largest economy is struggling to sell its goods abroad though domestic demand is strong.
Seasonally-adjusted exports tumbled 2.4 per cent, data from the Federal Statistics Office showed.
Shipments abroad, traditionally the backbone of the German economy, are suffering this year as the euro zone crisis eats away at demand in Europe, Germany’s largest export market, while a slowdown in China reduces appetite in the country many German firms had looked to as an alternative.
“It’s not a collapse, we’re seeing a soft patch, probably driven by weakness in emerging markets combined with continued weakness in the euro zone, although there are some signs of stabilisation,” said Christian Schulz at Berenberg Bank.
The government expects exports to be a drag on gross domestic product (GDP) this year and is instead relying on private consumption, helped by higher wages, a robust labour market and moderate inflation, to support growth.
A 1.7 per cent increase in imports will therefore be welcome news for the government as it shows Germans are buying more goods from abroad.
The rise in imports also offers hope to struggling euro zone states seeking to export their way out of their downturns.
The German economy was a bastion of strength during the early years of the euro zone crisis but it weakened last year and is now struggling to overcome a contraction in late 2012 and a subdued start to 2013, when it only just avoided a recession thanks to private consumption.
Recent data from Europe’s economic powerhouse has been mixed, with sentiment surveys improving, the private sector expanding, joblessness falling and retail sales rising, though industrial orders have dropped.
The seasonally-adjusted trade surplus narrowed to €14.1 billion from a downwardly revised €17.5 billion in April.