German Trade Balance Steadies on Solid Exports

The German trade deficit is stabilizing in the €13bln to €14bln range. Nominal export and import growth rates are accelerating sharply; led by import growth. And real export orders are continuing to grow.

However Yr/Yr trends on nominal growth show a stayed decline in momentum for exports and for imports with exports actually weakening a bit faster recently. While the simple monthly members seem to be reassuring the 12-month trends are anything but reassuring.

But German data are on a bit of a roll right now with the last German industrial orders and industrial output reports being much stronger than had been expected.

In real terms German exports are in fact holding up slightly better. But global export growth has slowed. Japan has been taken out of the export picture with its export growth volumes falling from growth at over a 40% annual rate in 2012 to rates just under zero. There is continuing weakness in exports in the UK. Despite falling unit labor costs in Spain’s export volumes are still weakening. US export trends are just ahead of Germany’s trends. But in overall nominal terms Germany is not doing much differently than EMU as a whole (see chart above).

The export data paint a clear picture of global export growth being slow based on this small but solid set of countries. In Germany exports appear to be holding up, but in a broad context they are still part of a global slowdown. Still, the Zone is a growth-challenged place. Yet recent German activity reports have been upbeat. With the new problems for Greece on the board it is just about anything goes right now in Europe. Spain is trying to address its neglected banking sector problems. Greece is a wild card. And German data are hopping all over the place –possibly accelerating- making it difficult to figure out what is really going on there. Risk remains high. The danger of contagion hangs in the air.

German Trade Trends for Goods   M/M% % SAAR   Mar-12 Feb-12 3M 6M 12M 12MPrev 2Yr Ago Balance* €13.73 €13.77 €14.21 €13.93 €13.32 €12.86 €12.27 Nominal EXPORTS Goods Exports 0.9% 1.5% 26.0% 1.9% 2.2% 18.2% 40.5% Capital gds   5.8% 10.9% 4.5% 11.4% 20.2% 11.7% Motor Vehicles   4.6% 7.3% -10.8% 7.2% 25.3% 38.7% Consumer Gds   -2.7% -7.5% 1.2% 4.9% 12.2% -0.2% Nominal IMPORTS Goods Imports 1.2% 3.6% 32.6% 6.1% 3.4% 18.8% 37.8% Capital goods   0.0% -15.6% -0.5% 0.9% 28.0% -3.9% Motor Vehicles   5.7% 14.6% 17.6% 7.2% 37.0% 2.8% Consumer goods   3.3% -7.1% -10.9% 6.8% 14.6% -4.3% ratio X:M 117.6% 117.8% 119.1% 117.9% 115.6% 122.8% 115.6% Real X -orders 3.0% 1.7% 3.2% 9.4% -0.8% 12.2% 45.0% *Eur Blns; mo or period average; Shaded area trends lag one Mo