German exports have risen above pre-pandemic levels, even as factories encountered persistent supply bottlenecks
Germany’s exports rose 1.3% in June marking 14 months of continuous growth, according to the Federal Statistics Office.
The figures come despite industrial output falling in the same period due to shortages and supply bottlenecks of commodities including semiconductors for microchips and timber.
The country’s exports are now above pre-pandemic levels, up 1.1% compared to February 2020, the month before restrictions were imposed in Germany due to Covid. And figures rose by 23.6% compared to June 2020 at the height of the pandemic.
It’s a positive sign for the German economy, being far ahead of the predicted 0.4% level of growth, according to The Wall Street Journal.
The upswing was mainly driven by increased business with the US and China, Germany's two biggest trading partners outside of the EU.
Exports to the US increased by 39.8% to reach €10.3bn while trade with the UK increased in both exports (+11.0% to €5.5bn) and imports (+11.5% to €2.7bn).
Germany’s overall imports are also showing an upward trend, increasing by 0.6% in June, up 27.0% over June 2020. Imports were 10% higher than in February last year.
Carsten Brzeski, global head of macro at ING Research, cautioned that while the rises were positive, there could still be further disruption to exports due to supply shortages.
“Today’s strong data illustrates that supply chain frictions have not yet affected German exports. However, looking ahead, this could still change,” he said.
“While order books are still richly filled, supply chain frictions, particularly the lack of microchips, could lead to more delivery problems in key sectors like the automotive industry and therefore to some distortions of export data in the coming months.”
Semiconductor chips are integral for the automotive industry, with every car containing approximately 1,500 chips that form the basis of circuit boards to control high-end extras like navigation systems as well as basic functions such as steering.