German goods exports rise in May, further significant increase likely in June
German goods exports rose in May, making up for part of the slump seen in March and April. On a sequential basis, goods exports rose 9 percent. Consensus expectations were for a rise of 14 percent.
Exports to all major trading partners have dropped greatly and do not indicate considerable rebound. Only the euro area has rebounded slightly, but deliveries to this region were still nearly 30 percent below the level reached in May 2019.
The year-on-year rates for exports to China and the U.S. remained the same. Nevertheless, the fall in trade with China is much smaller because of the extensive recovery of the Chinese economy. Furthermore, the fall compared with the same month last year is expected to be more attributable to lower production in Germany because of the corona lockdown than to soft demand from China, said Commerzbank in a research report. On the contrary, the continuing sharp fall in exports to the U.S. probably primarily shows that demand for German goods there had not yet rebounded in May.
“At least for June, a further significant increase in exports can be expected. According to the German Automobile Association, almost twice as many cars were exported in June as in May, and other sectors are also likely to have increased their deliveries significantly. Nevertheless, goods exports in the second quarter are likely to have fallen by well over 20 percent compared with the first three months of the year”, added Commerzbank.