Global downturn hits German trade surplus
Published on: 09 Feb 2009 13:50 CET
With the country's key export sector struggling and imports surging, the surplus fell by 8.7 percent from a 2007 to €178.2 billion ($226.8 billion).
"The export data seamlessly fit into the series of recent ugly industrial figures," commented UniCredit Group analyst Alexander Koch.
An export slowdown is especially bad news for Germany, the global export leader about to be overtaken by China, because trade is its main source of growth. And the data showed that German exports were losing steam at the end of the year.
With French economic activity set to contract in early 2009 amid a record trade deficit, the eurozone's two biggest economies are struggling to cope with the global economic downturn.
Germany said its 2008 trade surplus fell sharply amid weakening demand for automobiles and machine tools, hard-core components of German export might.
Analysts said trade would weigh again on overall economic output, estimating that activity could contract by another 2.0 percent in the fourth quarter of 2008 from the previous three months, worsening an already painful recession.
The economy shrank for much of last year, and German officials have forecast that the economy will contract by 2.25 percent more in 1009. In 2008, total exports increased by 2.8 percent while imports gained 5.8 percent, the Federal Statistics Office said.
Last week, data showed that industrial output suffered its biggest decline in December since records for a reunited Germany began in 1991, prompting UBS economist Martin Lueck to declare the sector was gripped by an "ice age."
Industrial orders fell in December by more than double the amount expected and plunged by 25.1 percent for the year as a whole, signalling sluggish output in the months to come.
The trade surplus for December alone came to €6.9 billion, down from €9.9 billion in December 2007, the stats office said.
"There is no recovery to expect in the months ahead," Solveen warned. "There are currently no signs of an early recovery of foreign demand."
A key German export, automobiles, has been slammed by a slump in global markets, but sales of machine tools and other capital goods used to make finished products have fallen as well.
Germany has been hit "harder than most other important export countries," Koch said.
Figures provided by the German central bank showed that Germany's current account, the broadest measure of trade, posted a surplus of €162.5 billion last year, down from €180.8 billion in 2007.
And while the value of German merchandise exports in dollar terms exceeded that of Chinese companies for 2008 as a whole, Germany's "sixth annual title in a row" would likely be its last, Koch said.
"On a monthly basis, China eventually has wrested the throne at the end of 2008," he estimated.
Trade fell worldwide in 2008, with businesses from Chinese toy makers to French champagne producers reporting sharply lower sales. Government packages aimed at boosting recession-hit economies have been scrutinised for signs of protectionism, which economists say contributed to turning a 1930s recession into the Great Depression.