GERMAN DATA
The German trade balance declined significantly in September, to E17.9bln (seasonally-adjusted, vs E20.9bln cons; E21.4bln prior). This was driven by a 2.1% rise in imports (+0.6% cons; -2.6% prior) and a 1.7% decline in exports (-2.4% cons; +1.2% prior).
- Across countries, the picture was rather one sided this month: declining exports (EU -1.8%, non-EU -1.6%) and an increase in imports (EU +1.6%, non-EU +2.6%).
- Exports to the US were an outlier, increasing 4.8% in September (although big picture they have still broadly flatlined since 2022). Exports to China has continued their recent decline - they are now at their lowest level since March 2020 (one month during peak Covid), prior to that they are the weakest since May 2017.
- Looking ahead, there appears to be little sign of an imminent revival of external demand for German products: IFO export expectations fell for the fifth consecutive time in October, to -6.7 points (vs -6.5 Sep) - “[German] companies do not currently benefit from the positive economic development in other countries”.
- The broad-based imports increase meanwhile could be interpreted as another sign of domestic demand picking up a little. That follows consumer consumption contributing positively to Q3 GDP according to Destatis' comments on the respective flash release, the consumer climate remaining on a broader uptrend, and also retail sales having seen three months of revival.
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