2023.03.0308:58:00UTC+00German Exports Rebound In January

Germany's exports rebounded more than expected in January underpinned by shipments to the US, although the overall increase was insufficient to offset the decline in December, official data revealed Friday.

Exports increased 2.1 percent on a monthly basis in January, in contrast to the 6.3 percent decline in December, Destatis reported. Shipments were forecast to grow 1.5 percent.

At the same time, the decline in imports eased to 3.4 percent from 5.6 percent in the previous month. Economists had forecast imports to grow 2.0 percent.

As exports increased amid falling imports, the trade surplus rose to EUR 16.7 billion from EUR 10.0 billion in December. This was well above economists' forecast of EUR 11 billion.

On a yearly basis, growth in exports almost doubled to 12.2 percent from 6.3 percent in the previous month. Likewise, imports growth accelerated to 7.7 percent from 3.6 percent.

The unadjusted trade balance showed a surplus of EUR 10.8 billion in January, which was bigger than a EUR 5.4 billion surplus posted in the same period last year.

Trade with EU and the euro area countries remained moderate. Exports to EU countries rose 0.7 percent and imports from those countries gained 0.6 percent. Likewise, shipments to the euro area countries moved up 0.5 percent and imports from those countries fell 1.0 percent.

Exports to the US and China were up 3.1 percent and 1.4 percent, respectively. Meanwhile, imports from China decreased 6.0 percent and imports from the US climbed 8.8 percent.

In the very near term, the current weakness in export order books together with the expected slowdown of the US economy, high inflation and high uncertainty will leave a clear mark on German exports, ING Economist Carsten Brzeski said.

"The reopening of the Chinese economy will probably not be enough to fully offset the long series of downward risks," the economist added.

The Purchasing Managers' survey published today showed that while external demand for services continued to act as a drag, reflecting challenging international market conditions, the fall in Germany's new export business eased to the slowest for six months.

The services Purchasing Managers' Index registered 50.9 in February, up slightly from January's 50.7 and the flash score of 51.3. The largest euro area economy had contracted 0.4 percent in the fourth quarter, suggesting that hopes of a shallow recession in the biggest euro area economy were premature.

In the February monthly report, Bundesbank said the economic output will fall again in the first quarter, but things could slowly pick up again as the year progresses.