German Exports Fall Further, Clouding Picture of Resilience — 2nd Update

By Don Nico Forbes

German exports fell again in August, pointing to volatility in international demand and dimming hopes that trade will underpin the country's economic growth this year.

Exports declined 0.8% on month to 137.6 billion euros ($154.08 billion), following a 0.5% decline in July, Germany's statistics agency said Thursday. This marks the largest fall in exports since November 2025.

Imports rose 0.9%, driving a narrowed trade surplus to 19.5 billion euros.

"Today's export data dents the narrative of German resilience," said Carsten Brzeski, economist at ING.

Net exports supported Germany's economic growth in the first half of the year, with exports rising in every month except January. The country's manufacturers enjoyed an unanticipated bump in demand as Asian competitors faced even greater supply-chain disruptions from the war in Iran, while orders were also driven by companies seeking to stockpile inventory in anticipation of higher energy costs.

But a fall in exports for August suggests international demand for German products continues to be volatile. Economists say risks for industrial demand remain to the downside as the war in Iran keeps driving up energy costs, weighing on Germany's already beleaguered competitiveness on the international market. New factory orders in the eurozone's largest economy plummeted 10.6% in August, according to figures published Tuesday.

"The disappointing export performance in July and August could be a sign of how low water levels in main rivers have been affecting the economy," Brzeski said, referring to the Rhine River, a key industrial waterway which hit record lows over the summer due to extreme heat.

Deeper structural shifts are also playing a part. Cheaper goods from China continue to pose a significant threat to German manufacturers, undercutting the country's competitiveness on international markets. Exports to China rose 4.7% in August, though this was more than offset by an 11% rise in imports.

Meanwhile exports within the eurozone continue to support trade, rising 0.8%, while exports to the U.K. jumped 16.7%.

Exports to the U.S. declined 6.3%. President Trump announced a fresh 10% tariff on EU goods imports in July, replacing temporary levies imposed in February.

The overall decline for August comes despite higher sentiment among companies, with export expectations remaining elevated in September following a surge in August, the Ifo Institute said last month. Industrial production also jumped in August at its strongest pace since March 2025.

On Wednesday, the BGA, Germany's main trade association, hiked its export growth forecast for this year to 1% from 0.6%, boosted by solid demand within Europe, but signaled the global trade remained highly uncertain.

"This is a positive signal, but no reason to sound the all-clear. The declines in our exports to the U.S. and China, in particular, demonstrate how volatile the situation remains," said BGA President Dirk Jandura.

Write to Don Nico Forbes at don.forbes@wsj.com

(END) Dow Jones Newswires

October 08, 2026 03:18 ET (07:18 GMT)