BDI Foreign Economic Report

©BDI/ Fotolia

In the first half of 2010, German exports recovered a significant portion of lost ground.

In Germany, exports in the first half of 2010 recorded a 17.4% increase relative to the same period in the previous year, largely compensating the losses they had incurred as a result of the financial and economic crisis. Exports to non-European countries in the last quarter grew by 11.4%, even exceeding levels reached shortly prior to the crisis in 2008. The reasons for the upward trend include strong demand especially from Asia and Latin America and a weak euro, which fell to a low of 1.19 US$ / euro. Despite the renewed decline in July of 1.5% compared to the previous month, German exports in the past 12 months are clearly trending upwards, with the latest monthly data nearly reaching pre-crisis levels. And orders from abroad also point to a continued recovery of exports. Since May, foreign orders have followed an upward trend and were 7% above pre-crisis levels in June. However, the sharp correction in July (–5% relative to pre–crisis levels) shows that the development also still is very volatile. In the first half of 2010, all key industries of the German export sector benefited from the economic boom. In the automotive industry, the positive development has continued over the past months both with respect to cars as well as commercial vehicles.

However, there are signs that demand for cars is weakening in Western Europe and the US. In the first half of the year, the chemical industry was able to return to pre–crisis levels and is benefiting from strong demand in Asia, Latin America and the Middle East. But also in this industry, growth rates are expected to fall in the second half of the year. In the first half of the year, the electrical industry was able to regain two thirds of its crisisrelated drop in exports. In the first half of the year, mechanical and plant engineering exports to Asia and Latin America approached pre-crisis levels again; however, US and European demand is developing poorly. Food industry exports remain robust. Steel Exports in the first half of the year surged especially as a result of strong demand from non-European countries, but the high level is only expected to last until the end of the year. The non–ferrous metals industry is benefiting from the demand from Asia and expects double–digit growth rates for the total year 2010. The civil aviation sector of the aerospace industry is set to expand significantly in the course of the year as a result of orders from the Middle East and Asia. Also supported by Asian markets, textile industry exports in this year are approaching their pre–crisis levels, while sales to the EU and the US remain weak. Shipbuilding will still remain stable in 2010. The strength of the German economy is also evident with respect to imports. In the past half year, imports increased 9.6% and 10.4% in the first and second quarters, respectively, in each case in relation to the previous quarter. The figure for June 2010 (€ 71.1 billion) is the highest ever recorded since the beginning of the external trade statistics.