German exports unexpectedly fell in August due to a sharp drop in shipments to the United States, signaling that the eurozone's largest economy is losing momentum after a strong first half. Exports fell 0.8 percent from the previous month, data released on Thursday by the Federal Statistical Office showed.“The result was at odds with the forecast for growth of 0.6 percent in a Reuters poll.
“Trade is the area where Germany's resilience is cracking“, said Carsten Brzeski, head of global macroeconomic research at ING. Although German exporters benefited in the second quarter – as the closure of the Strait of Hormuz hit their Asian rivals harder – The third quarter has so far been a decline, Brzeski noted.
“The current decline shows that the recovery in exports was only a breath of fresh air“, said Volker Treyer, head of the “Foreign Trade“ department at the Association of German Chambers of Commerce and Industry (DIHK).
Imports rose 0.9 percent compared to July, adjusted for calendar and seasonal factors. As a result, Germany's trade surplus narrowed to 19.5 billion euros ($21.8 billion) in August from 21.6 billion euros in July.
Despite rising prices linked to the Iran conflict and uncertainty caused by US tariffs, the German economy showed resilience in the first half of the year, growing 0.4 percent in the first quarter and 0.3 percent in the second. Third-quarter GDP growth will not reach the levels of the previous two quarters, said Thomas Gitzel, chief economist at VP Bank, adding that it is likely to be modest.
Exports to EU countries fell 0.6% month-on-month in August, while those to countries outside the bloc fell 1.1%. Exports to the United States fell 6.3% from July, while those to the United Kingdom rose 16.7%. At the same time, exports to China rose 4.7%, but imports rose even more – by 11.0%.