Germany, the heart of Europe, is experiencing a slowdown in economic activity in a couple of months. A series of factors, including supply chain disruptions, Geopolitical challenges, and global downturn, are responsible for this weakening demand in May and June. This all together affecting the Germany’s trade performance.
Despite these challenges, Germany’s economy remains the largest in Europe. Let’s understand the factors, and how your business can fill the gap with exports and imports.
Germany’s Export: The Economic Powerhouse of Europe
A significant downturn in Germany’s economic activity in May is due to several factors, such as rising energy costs, and inflationary pressures. This decline raises a concern for businesses as it may cause delays in investments, and a decrease in exports and imports business. Let’s understand how export businesses are affected and the countries that depend upon Germany’s supplies. Here’s a quick view –
Germany’s exports to all top destination countries increased from January to April 2024, but, this upward growth trajectory took a downward trend in May 2024. The USA, France, Netherlands, Poland, and China, are the top export partners for Germany with $14.3, $10., $9.9, $8.5, and $8, billion respectively, in May 2024. The biggest-ever decline registered with $1.7 and 1.3 billion, respectively with France and the USA in the same month.
| Countries | Jan – 24 | Feb – 24 | March – 24 | April – 24 | May – 24 |
| USA | 13.0 | 14.9 | 15.6 | 15.6 | 14.3 |
| France | 11.6 | 11.5 | 11.3 | 12.0 | 10.3 |
| Netherlands | 10.4 | 10.0 | 10.8 | 10.8 | 9.9 |
| Poland | 8.9 | 8.7 | 9.0 | 8.7 | 8.5 |
| China | 8.3 | 8.5 | 9.1 | 9.4 | 8.0 |
Value USD Billion
Comparing Germany’s trade performance, the decline in imports is less than its overall export value. China, Netherlands, USA, Poland, and Italy’s exports to Germany decreased by $100, $400, $400, $900, and $200 million respectively, in May 2024, compared to the previous month. It’s interesting to note that, China’s exports to Germany increased from $12.6 billion in Jan to $13.4 billion in May 2024.
| Countries | Jan – 24 | Feb – 24 | March – 24 | April – 24 | May – 24 |
| China | 12.6 | 12.9 | 14.4 | 13.5 | 13.4 |
| Netherlands | 9.1 | 8.4 | 8.9 | 8.8 | 8.4 |
| USA | 8.3 | 7.6 | 8.4 | 8.4 | 8.0 |
| Poland | 7.2 | 7.1 | 7.3 | 7.5 | 6.6 |
| Italy | 6.2 | 6.3 | 6.5 | 6.4 | 6.2 |
Value USD Billion
Also Read : Germany’s Top Export Commodities To USA
What Are Germany’s Top Exports Products?
Germany’s Economy has long been renowned for its strong export-oriented growth. It’s key export products consist of medicaments, motor cars, immunological products, gearboxes parts, Aeroplanes and other parts with export values of $4.5, $4.5, $2.6, $1.4, and $1.4 billion in May 2024. This downfall in exports, compared from the previous month, brings opportunity for local and foreign players to fill the gap.
| Products | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 |
| Mixed or Unmixed Medicaments | 4.7 | 4.8 | 5 | 4.3 | 4.5 |
| Motor cars & other vehicles | 3.3 | 4.6 | 5 | 5.2 | 4.5 |
| Immunological products, etc. | 3.1 | 2.8 | 3 | 3.3 | 2.6 |
| Gear boxes & parts | 1.5 | 1.5 | 1.4 | 1.6 | 1.4 |
| Aeroplanes & others | 0.9 | 1.4 | 2 | 2.2 | 1.4 |
What Are the Top Imports Products in Germany
Germany trade performance shows a strong demands foreign goods because of its industrial base with limited natural resources. To meet the needs of its people and economic activity, Germany is heavily relying on imports for raw materials, energy intermediate goods, etc. Let’s take a view on Germany’s imports market –
Among the top importing goods, crude and petroleum oil stood at the top with $21.3 billion from Jan to May 2024. Whereas the mixed or unmixed medicaments imports declined by $400 million in May 2024, compared to the previous month. However, immunological product supply to Germany increased by $100 million in May 2024. This sudden spike shows a new emerging market for foreign players to dive into to expand their business base.
| Products List | Jan-24 | Feb-24 | Mar-24 | Apr-24 | May-24 |
| Crude & Petroleum Oil | 3.6 | 4.1 | 4.7 | 4.8 | 4.1 |
| Mixed or Unmixed medicament | 2.8 | 2.2 | 2.1 | 2.4 | 2 |
| Lithium-Ion-Accumulators | 1.4 | 1.6 | 2.4 | 1.6 | 1.4 |
| Immunological products | 1.2 | 1.1 | 1.2 | 1.2 | 1.3 |
| Natural Gas In Gaseous State | 1.7 | 1.5 | 1.6 | 1.5 | 1.3 |
Value USD Billion
Germany’s Trade Performance
Germany’s exports to the USA, France, and the Netherlands, increased by $6.9, $3.5, and $4.5 billion respectively, in 2023. On the other hand, import value decreased by $33.4 and $6.5, respectively for China and the Netherlands, in 2023. The drastic decline with China shows, diversification of trade, and weakening of trade relations. For a comprehensive trade view, check the table.
| Countries | Germany’s Top Exports | Countries | Germany’s Top Imports | ||
| 2022 | 2023 | 2022 | 2023 | ||
| USA | 163.9 | 170.8 | China | 202.7 | 169.3 |
| France | 123.8 | 127.3 | Netherlands | 113.0 | 106.5 |
| Netherland | 116.5 | 121.0 | USA | 97.9 | 99.4 |
| China | 112.5 | 105.2 | Poland | 82.2 | 87.7 |
| Poland | 97.4 | 97.6 | France | 73.6 | 74.8 |
Value USD Billion
How Downturn In Germany’s Trade – Raises Concern for Businesses?
Downturn trends in any economy may affect the business in several ways. Some of them are mentioned below –
- Discourage Investors
If the fundamentals of the country’s economic activity are not strong, investors will try to look at other sources for better opportunities.
- Increase Cost
Businesses may face higher costs for raw materials, energy, and other inputs due to the slowdown. Further, this could affect the costs and profit margins.
- Supply Chain Disruption
Exporters and importers may face hurdles while trading with Germany, this could drastically affect the business operations across the regions.
The decline in Germany’s trade performance In May 2024, shows the effect of geo-political challenges. Despite this, the country’s exports to the USA, France, and other countries are increasing. Hence, it becomes crucial for the government to implement macro and microeconomics policies to sustain the growth trajectory. This will help to attract investment and increase exports.
