Wiesbaden – The economy in Germany continues to grow
In November, the total production increased and exports had risen more than for over four and a half years no longer, said the Federal Statistical Office on Monday in Wiesbaden. The economy has recently gained momentum, experts say. First episodes of Brexit but would have made noticeable. In addition, more risks lurk in 2017 – so the German economy can now make good use of any tailwind.
The export trend provided a positive surprise: exports rose by 3.9 per cent in calendar and seasonally adjusted terms compared to the previous month. That was the strongest increase since May 2012. Economists had expected only a plus of 0.5 percent. Compared with the corresponding month of the previous year, exports rose by 5.6 percent. Once again, record values have been achieved.
“Germany has never exported and imported goods of such high value in one month as in November 2016,” comments Stefan Kipar, an expert at Bayern LB.
Nevertheless, the first effects of the upcoming withdrawal of Great Britain from the European Union would have been shown, the analyst said. “The least positive development in exports to EU countries that do not belong to the euro, where the Brexit referendum unfolds probably first negative impact.” A more detailed breakdown by country will not be published until one month. According to Kipar, however, German exports to Great Britain were already 15 percent below their year-earlier level in October.
Total imports rose more-than-expected in November. They rose 3.5 percent to the previous month. Here, an increase of 1.1 percent had been expected. Compared with the previous year, imports increased by 4.5 percent.
Meanwhile, there was also a robust development in the total production in the manufacturing industry. It has risen by 0.4 percent in November compared to the previous month. Economists, however, had expected a stronger increase of 0.6 percent. In October, production had risen by a revised 0.5 percent. Initially, an increase of 0.3 percent had been determined here.
Tighter industrial production rose 0.4 percent mom in November. The production of consumer goods and intermediate goods increased. By contrast, production of capital goods declined slightly, albeit following a significant increase in October. Outside of industry, energy production in November was 0.4 percent lower than in the previous month. In contrast, the total value was supported by construction output, which rose by 1.5 percent.
Trend will probably continue
Andreas Rees, Germany’s chief economist at Bank Unicredit, continues to expect a positive development in production and exports. There is a substantial surplus demand, which still needs to be reduced. “A further increase in industrial production and exports is therefore a foregone conclusion, apart from possible fluctuations in the monthly data.”
Overall, the economy should have ended the year 2016 solid and the conditions for a good start to the new year are given, writes expert Kipar. In view of the numerous political risks – Brexit as well as elections in Germany and France – the German economy could, however, “use every tailwind well in 2017”.