German export decline prompts industry fears and relocation plans
Deutsche Welle writes that there is no hope for an improvement in German export indicators. In June, German exports fell by £2.9 billion compared to May. On a year-to-year basis, exports dropped by 4.4%, while imports decreased by 6.4%. Experts are raising alarms.
German exports were 3.4% lower in June than in May, amounting to £108.2 billion. According to analysts, this decline is more than double the anticipated figure. Meanwhile, imports rose by 0.3% to £91.0 billion.
Deutsche Welle, citing the Federal Statistical Office, highlights that German exports to the USA fared significantly worse - a decrease of 7.7% - to £10.9 billion. On the other hand, cooperation with China increased; Germany exported goods worth £6.7 billion to China (a 3.4% increase). However, Germany is importing significantly more products from China (£10.5 billion). Exports to EU countries also shrank by over 3% (nearly £59.2 billion).
Deutsche Welle writes about "gloomy forecasts" for the German economy. "On a year-on-year comparison up to June 2023, German exports fell by 4.4%, while imports dropped by 6.4%," it reads.
The Foreign Trade Association speaks of the need to reduce bureaucracy and "facilitate access to foreign capital." Jörg Krämer, chief economist at Commerzbank, also sees gathering clouds over Germany.
"German industrial production has only recovered halfway from last month's collapse. That speaks volumes. And the weakness of leading indicators does not suggest a strong revival in industrial activity in the coming months. It is nothing more than inertial motion," assessed Krämer, quoted by Deutsche Welle.
German companies are primarily struggling with a decline in orders, which affects other sectors.
Relocating production
The worsening situation has led more German companies to consider relocating abroad. According to a study by the German Chamber of Industry and Commerce (DIHK), 37% of companies responded that they plan to take such steps.
The main reason for this situation is the high energy prices in Germany. Entrepreneurs warn that despite a certain decline, electricity and gas costs remain uncompetitive compared to other countries, particularly the United States. Additionally, companies complain about lengthy permit issuance processes, which hinder their business expansion.
