Business sentiment in Germany‘s export industry is in ‘freefall’, according to the latest German Export Expectations report from the ifo Institute.
According to the Institute, the export expectations index fell to -6.3 points in September, down from -5.2 points in August.
“Industry is complaining about a lack of orders from abroad,” commented Klaus Wohlrabe, head of ifo Surveys. “The export industry is going through a weak phase.”
‘Significant losses’
The ifo noted that this weakness is especially pronounced in the metal and automotive sectors, with both expecting ‘significant losses’ in foreign demand.
However, a few industries remain optimistic. Producers in the food and beverage sector, as well as manufacturers of glassware and ceramics, anticipate a potential growth in exports, according to the ifo.
Elsewhere, the chemical industry is experiencing a balanced outlook, with equal numbers of positive and negative responses, indicating that export activity in this sector is likely to remain stable, the ifo Institute said.
Domestic uncertainty
Commenting on the findings, Carsten Brzeski, global head of macro at ING, commented, “The cyclical hope that grabbed the German economy in the first months of the year has disappeared, mainly due to a weaker global economy but also because of fears of a cooling US economy, ongoing geopolitical tensions and domestic policy uncertainty.
“Additionally, the increasing number of insolvencies and individual company announcements of upcoming job restructurings are still hanging like the Sword of Damocles over what has been one of the few strongholds of the economy in recent years: the labour market.”
