Export conditions continued to be ‘subdued’ in Germany in April, however purchasing ahead of the introduction of US tariffs provided some support to order books, according to the latest HCOB Germany Manufacturing PMI Export Conditions Index.
The export conditions index stood at 50.2 in April, down from 50.9 in March and just above the neutral threshold (50.0).
Muted conditions
The latest index reading was the lowest for three months, indicating muted conditions for German exporters. While Asia showed signs of improvement – growing at a faster pace than all other regions – North America saw its weakest performance in over two years, mainly due to slower US economic growth and slowing activity in Canada and Mexico.
Exporters also cited economic growth headwinds and delayed investment plans in response to US tariff announcements as among the obstacles to growth.
At the same time, Europe showed some resilience, with export conditions improving slightly for the second consecutive month – an improvement on the worsening conditions seen during the second half of 2024 and for much of the past three years.
‘No further improvement’
“Export conditions for Germany, which had improved slightly last month, showed virtually no further improvement in April,” commented Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. “All major regions contributed to this, but the climate in North America was particularly gloomy, with the index falling below the 50 threshold for the first time since September 2023.
“In addition to the US tariff burden, German exporters are also facing weaker demand in North America. Europe, as the most important export destination for German exports, is unable to provide any real counterbalance, and Asia, where a number of economies are being affected by the US tariffs, is showing even less momentum than in March. The significantly improved export performance observed in official trade data in Germany in the first quarter is therefore probably due primarily to pull-forward effects, as US importers are trying to avoid higher tariffs.”
As de la Rubia noted, these pull-forward effects can be seen in export orders, which saw an increase in April having largely declined in past months.
“The level of US tariffs and how long they remain in place will be decisive for the global economy and thus also for German exporters,” he noted. Read more here.
