German exports fall at fastest pace since financial crisis

German exports plunged in August by their largest amount since the height of the global financial crisis and imports also fell sharply in the latest sign that Europe’s largest economy is feeling the pain from a slowdown in emerging markets.

Data from the Federal Statistics Office showed seasonally-adjusted exports sliding by 5.2 per cent to €97.7 billion month-on-month, the steepest drop since January 2009. Imports tumbled by 3.1 pe rcent to €78.2 billion, the biggest one-month decline since November 2012.

Germany’s trade surplus narrowed to €19.6 billion. Economists said the data appeared to have been weighed down by the large number of holidays in August this year. But following sharp declines in industrial orders and output during the month, it also suggested that waning demand from abroad, particularly China and other emerging markets is beginning to leave its mark on Germany. “This is a strong fall, the kind you don’t see every day,” said Holger Sandte, chief European economist at Nordea. “Weakness in China, Brazil, Russia and other markets is having an impact.”

Economists polled by Reuters had been expecting much smaller declines in exports and imports of 1.2 per cent and a surplus of €22.5 billion.

The German economy has posted four straight quarters of growth since suffering a mild contraction in the second quarter of 2014, expanding by 0.4 per cent in the April-June period of this year. But there are darkening clouds on the horizon.

In addition to the slowdown in emerging markets, the diesel emissions scandal swirling around Germany’s biggest carmaker Volkswagen could damage the country’s biggest export industry and tarnish the “Made in Germany” image. Germany’s auto industry accounts for roughly one in five jobs. It accounted for 17.9 per cent of Germany’s €1.1 trillion in exported goods last year, according to Deutsche Bank, and has enjoyed above-average export growth since.

Reuters