Germany: Exports drop in June and close out a weak second quarter
August 9, 2019
German trade data brought no reprieve in June; exports fell 0.1% month-on-month on a calendar- and seasonally-adjusted basis in June, contrasting the upwardly revised 1.3% expansion in May (previously reported: +1.1% month-on-month). Meanwhile, imports swung from a revised 0.3% contraction in May (previously reported: -0.5% mom) to a 0.5% month-on-month expansion in June. As a consequence, the trade surplus shrank from EUR 18.7 billion in May to EUR 18.1 billion in June.
On the year, exports dropped a whopping 8.0% in June, strongly contrasting the 4.6% expansion in May: the 12-month moving sum of exports increased 1.3% in June, down from 2.7% in May. Imports also fell strongly over a year ago, contracting 4.4% in June and swinging from a 5.1% expansion in May: the 12-month moving sum of imports grew 4.7% in June, down from the 5.9% increase in May. Hence the 12-month moving sum of the trade balance narrowed to EUR 219.3 billion in June from EUR 220.7 billion in the prior month.
Dr. Holger Bingmann, president of the Federation of German Wholesale, Foreign Trade and Services (BGA), stated that “the half-year balance for the German exporters is extremely meager. The global political and economic turmoil is now showing its impact.”
In the second quarter of the year, German exports fell 0.7% on average month-on-month, contrasting the meager 0.1% average expansion in the first quarter. Coupled with other data for the second quarter, worries have risen over economic growth as analysts consider a contraction in the quarter more likely.
Carsten Brzeski, chief economist at ING Germany, commentated that the American-Sino trade war is not directly affecting German exports. Instead, it is “the indirect impact from the ongoing trade conflict […], German exports to China and the US have performed better in the first half of the year than exports to other, often European countries. […] What is hurting German exports currently, is the uncertainty, which has spread across the globe and has also paralysed many European economies.”
Author: Jan Lammersen, Economist