Berlin (dpa) – An economic slowdown put a dampener on German foreign trade and industrial production last year, according to government data released on Friday.
Exports grew by only 0.8 per cent on the previous year, the Federal Statistical Office (Destatis) reported. By comparison, they increased by 3 per cent in 2018 and 6.2 per cent in 2017.
The value of goods exported nevertheless reached a record high in 2019 of 1,327.6 billion euros (1,456 billion dollars).
Foreign trade ramped up at the end of the year, with exports totalling 98 billion euros in December, up 2.3 per cent on the same month a year earlier.
Imports to Europe’s biggest economy increased in 2019 by 1.4 per cent to 1,104.1 billion euros.
A long-running trade war between the United States and China, which is only now being patched up between the two superpowers, was felt globally last year and particularly took its toll on the Chinese economy. This in turn impacted Germany’s export-focused economy.
The risk of an unregulated Brexit has also been set aside for now, although Britain’s future trading relationship with the European Union is yet to be hammered out.
Meanwhile, a new economic risk has presented itself in the form of the coronavirus outbreak above all in China, which is an important trade partner for Germany.
Germany’s industrial sector recorded a heavy slump at the end of last year, with industrial production dropping by 3.5 per cent from November to December, according to data released by Destatis on Friday.
It is the most significant decline since early 2009, when the economic consequences of the global financial crisis had started appearing.
Compared to December 2018, industrial production fell by 6.8 per cent – the largest drop seen since the end of 2009.
Analysts were caught off guard by the weak data. On average, they had expected a slight increase. For the German industrial sector, December marked the end of a “year to be forgotten,” ING bank economist Carsten Brzeski said.
Except for the energy sector, production was weak across the board in December. In construction, it nosedived by 8.7 per cent.
Over the whole fourth quarter, production in the manufacturing industry fell by 1.9 per cent, the Ministry of Economic Affairs announced on Friday. The decline was particularly pronounced among machine manufacturers and in the car industry.
“The economic downturn in the industrial sector is not yet overcome,” the ministry said.
But the ministry and some bank economists also qualified the weak data to some extent. The ministry argued that the decline in industrial production is likely overstated because of the high number of public holidays in December.
Commerzbank economist Ralph Solveen agreed and said he expects production to regain momentum at the latest in February.
“But that does not change the fact that the trend in production clearly continues to point downwards,” he added.