German foreign trade is defying the economic effects of the Ukraine war and the problems in supply chains. But economists warn: The export figures could prove to be flash in the pan.
Germany’s exporters are going into the difficult months with a bit of tailwind. Foreign trade closed April with growth – despite the economic upheavals resulting from the Ukraine war and restrictions due to the corona lockdowns in parts of China.
Economists expect further setbacks for the export nation Germany in the coming months.
According to the Federal Statistical Office, goods “made in Germany” with a total value of 126.4 billion euros were shipped abroad in April. That was 4.4 percent more than in March and 12.9 percent more than a year earlier, the agency said.
Good growth for German economy
“The April export growth is a pleasing economic start to the second quarter,” said the chief economist at VP Bank, Thomas Gitzel. “Since the service sector is also benefiting from catch-up effects, the German economy could do better than originally assumed in the spring months.”
However, according to the Association of German Chambers of Industry and Commerce (DIHK), the monthly balance sheet is not as rosy as it appears at first glance: “Unfortunately, the increase in exports in April is not a trend reversal. It is solely due to price increases in exports,” analyzed DIHK foreign trade chief Volker Treier. “In view of a price increase of 16 percent compared to the same month last year, exports have actually fallen in real terms.”
problems remain
Many supply chains still do not function smoothly. The industry lacks important materials. The restrictions in the port metropolis of Shanghai were largely relaxed on June 1 after two months of a strict lockdown. But according to experts, it will probably take months before the problems caused by the fight against the pandemic for the German economy are solved. “It will take a few weeks for the logistics to be rebuilt,” said the delegate from German industry, Maximilian Butek, in Shanghai. “It may be months before companies in Germany feel nothing.”
Another burden for companies are the rapidly increasing prices for energy, raw materials and primary products. “The export motor is crunching enormously,” says DIHK expert Treier. Companies would only feel the full force of the delivery bottlenecks after about two to three months. “The big end is yet to come.”
In a survey by the Munich-based Ifo Institute published on Friday, the majority of companies suffering from material shortages said the lockdowns in China had made the situation worse. “Sectors such as the automotive industry, chemicals, mechanical engineering or electrical equipment, which are closely intertwined with the Chinese economy, are hardest hit,” explained the head of the Ifo Center for Foreign Trade, Lisandra Flach.
Export figures 2022 positive
On an annual basis, German exports have so far been positive: At 489.4 billion euros, exports from January up to and including April were 10.9 percent higher than in the first four months of 2021. Imports totaled 466.2 billion euros. That is an increase of 24.8 percent.
The Wiesbaden statisticians only recorded a minus in the previous export statistics for 2022 in trade with Russia. In April, exports to Russia fell further over the month due to the sanctions imposed on the country following the attack on Ukraine and other measures to restrict exports.
After falling by more than 60 percent in March, German exports to the Russian Federation fell by a further 10 percent to 0.8 billion euros from March to April. Imports from Russia fell by 16.4 percent to 3.7 billion euros. Russia mainly supplies raw materials and energy.
