Germany’s exports unexpectedly declined in November on weak global demand, signaling that the economy is sliding into a mild recession.
Exports decreased 0.3 percent on a monthly basis, reversing a 0.8 percent rise in October, Destatis reported Thursday. The fall was in contrast to the 0.2 percent rise expected by economists.
The monthly fall in imports deepened to 3.3 percent from 2.4 percent a month ago. Economists had forecast a moderate 0.5 percent drop for November.
Reflecting the sharper decrease in imports, the trade surplus advanced to a seasonally adjusted EUR 10.8 billion from EUR 6.8 billion in October. The surplus was also above the expected level of EUR 7.5 billion.
Shipments posted an annual growth of 13.3 percent in November, which was bigger than October’s 11.4 percent increase. Meanwhile, growth in imports slowed to around 14.8 percent from 19.4 percent.
Compared to the same period last year, the surplus remained unchanged in November.
Most German exports went to the United States in November. However, shipments to the US decreased 1.5 percent and imports slid 1.4 percent.
Exports to China fell 1.5 percent and imports from China were down 7.8 percent. Meanwhile, shipments to the UK advanced 16.1 percent and imports grew 7.0 percent.
Earlier, a survey conducted by the ifo Institute showed that confidence among German exporters improved slightly in December, as they expect better demand conditions for the automotive and electrical sectors. The ifo Export Expectations index had climbed to a 6-month high of 1.6 points.
Nonetheless, the largest euro area economy is widely expected to enter a mild recession in the winter before recovering by the spring. In the third quarter of 2022, the economy had expanded 0.4 percent.
The Purchasing Manages’ survey results on Thursday showed that the downturn in Germany’s construction sector extended into the final month of the year. The construction Purchasing Managers’ Index rose slightly to 41.7 from 41.5 in November.