Germany year-end review 2023: Deterioration in exports

In July, the ifo Export Expectations about German export industry slipped to (-) 6.0 points, down from (-) 5.9 in June, due to weakening of demand from abroad as a result of restrictive monetary policy in the US and Europe. The situation continued in succeeding months. By September, ifo Export Expectations dropped further to (-) 11.3 points from (-) 6.5 points in August, signalling significant deterioration in sentiments of German export industry. Only manufacturing of leather goods saw rise in exports scoring ifo score of 11.2 points. On the other hand, the manufacturing of apparel and textiles experienced steep declines and delivered a fall to (-) 20.5 and (-) 26.8 points, respectively. Most of other sectors continued to anticipate a decrease in international business with exports to all key regions declining.

Despite 17 per cent decrease in orders, the sales of textile care, fabric and leather technologies sectors, for the period from January to August, grew 20 per cent in real terms as compared to the same period last year. According to German Machinery Association VDMA, this growth included a 61 per cent y-o-y increase in sales from Germany and a 9 per cent rise in sales from abroad. The 17 per cent decrease in orders comprised 7 per cent decrease in domestic orders and 20 per cent decrease in foreign orders. At the same time, associated shoe and leather technology manufacturers registered a 19 per cent growth in exports, reaching €37 million from January to July 2023 for which the main destination markets were the US, Mexico and France.

By November, sentiment in the German export industry improved. The ifo Export Expectations rose to (-) 3.8 points, up from (-) 6.3 points in October, raising expectation for increase in clothing exports. However, the exports were still expected to grow in a few industries only.

ALCHEMPro News Desk (WE SB)