German exports up in March but weak orders spoil party

FRANKFURT, Germany — German exports picked up in March but industrial orders fell unexpectedly, official data showed Tuesday, reflecting a mixed picture for Europe’s biggest economy.

Exports rose by 0.9 percent month-on-month after a decline of 1.6 percent in February, federal statistics agency Destatis said, defying expectations of a continued downward trend.

But new orders, closely watched as an indicator of future business activity, fell by 0.4 percent month-on-month.

Analysts surveyed by FactSet had expected a rise of 0.45 percent.

ING bank analyst Carsten Brzeski said the figures published Tuesday confirmed “the return of the export-driven German growth model”.

READ: German exports lose momentum in February

However, the weak industrial orders “spoiled the party of optimism”, he said, illustrating “the high risk that the revival of the export-oriented success formula is only short-lived”.

March orders were propped up by strong demand from the eurozone, but domestic orders fell by 3.6 percent and those from the rest of the world were down by 2.9 percent.

Costly energy, weaker demand

Exports to the European Union rose by 0.5 percent compared with February, and those to the rest of the world also increased by 1.3 percent.

Imports to Germany meanwhile were up by 0.3 percent month-on-month in March, with the country’s trade surplus coming in at 22.3 billion euros.

High inflation, costly energy, and weaker demand from key market China have weighed heavily on Germany’s key manufacturing sector in recent months.

READ: German industrial output fell more than expected in December

However, an expected recovery in domestic and foreign demand will mean that “incoming orders are expected to trend upwards again as the year progresses”, the economy ministry said in a statement.

The German government slightly increased its 2024 growth forecast in April to 0.3 percent, up from a previous prediction of 0.2 percent.

The German economy grew by 0.2 percent in the first quarter of the year, dodging a recession after a weak end to 2023.