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Non-EU Exports May Drop Questions April Incline

GERMAN DATA
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Preliminary May data questions the narrative that German non-EU exports have been increasing this year. The May print more than reversed a large increase in April. Looking on a longer-term basis it now appears as though German non-EU exports overall have been relatively unchanged since mid-2022.

  • Non-EU exports dropped 6.4% M/M (vs +4.7% April) to E58.6bln in seasonally- and calendar-adjusted terms (preliminary Destatis estimate).
  • Exports generally have been one of the drivers behind a gradual recovery in Germany in Q1, and April data suggested that this continued in Q2.
  • Taking this partial May print into account (full May trade balance data will be published at the beginning of next month), it appears that the external sector saw some more mixed developments in Q2 than recently anticipated. While the May data does not necessarily point to a rapid deterioration, it will be accounted for in net negative terms re GDP growth, and casts some doubt on the anticipated further uptick for international demand on German products.
  • Looking ahead, sentiment on exports continued to tick up, with the IFO export expectations indicator printing in positive territory for the first time since April 2023, at +0.3p (vs -1.5 April).

MNI, Destatis

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Preliminary May data questions the narrative that German non-EU exports have been increasing this year. The May print more than reversed a large increase in April. Looking on a longer-term basis it now appears as though German non-EU exports overall have been relatively unchanged since mid-2022.

  • Non-EU exports dropped 6.4% M/M (vs +4.7% April) to E58.6bln in seasonally- and calendar-adjusted terms (preliminary Destatis estimate).
  • Exports generally have been one of the drivers behind a gradual recovery in Germany in Q1, and April data suggested that this continued in Q2.
  • Taking this partial May print into account (full May trade balance data will be published at the beginning of next month), it appears that the external sector saw some more mixed developments in Q2 than recently anticipated. While the May data does not necessarily point to a rapid deterioration, it will be accounted for in net negative terms re GDP growth, and casts some doubt on the anticipated further uptick for international demand on German products.
  • Looking ahead, sentiment on exports continued to tick up, with the IFO export expectations indicator printing in positive territory for the first time since April 2023, at +0.3p (vs -1.5 April).

MNI, Destatis