Germany: Export growth rebounds in December
Data for the external sector provided some good news in the wake of disappointing industrial data. In December, exports expanded 1.5% over the previous month, swinging from an upwardly revised 0.3% month-on-month contraction in November (previously reported: -0.4% month-on-month). Imports also recovered, growing 1.2% over the previous month in December compared to November’s revised 1.3% mom drop (previously reported: -1.6% mom). Consequently, the trade surplus widened from EUR 18.9 billion in November to EUR 19.4 billion in December.
However, exports contracted a steep 4.5% in December compared to the same month a year prior (November: +0.1 year-on-year); as a result, growth in the 12-month moving sum of exports eased from 3.7% in November to 3.0% in December. Meanwhile, year-on-year import growth was flat in December, contrasting November’s robust 3.9% increase. Growth in the 12-month moving sum of imports consequently moderated to 5.7% in December from 6.1% in November. Furthermore, the 12-month moving sum of the trade balance narrowed slightly from a EUR 232.5 billion surplus in November to a EUR 230.4 billion surplus in December.
Looking at 2018 as a whole, Carsten Brzeski, chief Germany economist at ING, commented that “there simply seem to be too many crises in global trade for the German export sector to defy all of them.” While these crises range from emerging markets to increasing protectionism in the developed world and worries over Brexit and a Chinese slowdown, Brzeski pointed out that “the share of German exports going to China actually increased in the last few months of the year, to higher levels than the 2017 average. At the same time, despite trade war fears, the US remained the most important export destination in 2018.”