German exports unexpectedly jump

German exports rose unexpectedly at the end of 2021, official data showed on Wednesday.

According to Destatis, the country’s Federal Statistical Office, exports rose 0.9% in December on a calendar and seasonally-adjusted basis compared to November, when they increased by 1.8%, and by 15.6% year-on-year. For the year as a whole, exports rose 14.0% to €1,375.5bn.

Most economists had been expecting exports to decline by around 0.2% in December.

Imports also beat expectations and rose sharply, however, up 4.7% on November, when they increased 3.4%. Analysts had been expecting a 2.1% decline. Year-on-year, imports rose 27.8%, and increased 17.1% over the year to date, to €1,202.2bn.

As a result, the foreign trade balance in December fell to €6.8bn on a calendar and seasonally-adjusted basis, from a revised €10.8bn in November; for the year as a whole it was €173.3bn. December’s figure was well below consensus expectations of €10.4bn.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "Germany’s trade surplus is now almost gone, indicating that the Eurozone trade deficit widened further at the end of 2021. These data look dramatic, and in some sense, they are. The euro area’s largest economy has suffered a significant hit to its otherwise unshakeable trade surplus. Exports, however, are doing fine."

Among individual trading partners, Germany exported goods worth €63.3bn to fellow European Union countries in December, and imported goods to the value of €56.3bn.

Exports to the UK dropped 7.6% in December to €5.0bn, while imports slid 18.2% to €2.6bn. For the whole year, the first since the UK officially left the EU, imports slumped 8.5% while exports were down 2.6%.

Carsten Brzeski, global head of macro at ING, said: "Looking at export destinations, 2021 clearly marks a structural shift, illustrating current themes including reshoring, slowing of Chinese growth and different ways to deal with the pandemic. In 2021, the US was the single most important destination for German exports, accounting for almost 9% of all exports.

"Brexit has left its market, as the UK dropped out of the five most important trading partner lists, with German companies exporting more to Austria than to the UK.

"Looking ahead, export order books are filled to the brim. However, we will first need to see industry production picking up again before exports surge as well. It is very simple: without any new production, there won’t be new exports."