Supply woes hit exports

German exports fell in August for the first time since April 2020, official data showed on Friday, the latest indicator to turn red as supply bottlenecks stifle the economic recovery from the pandemic.

Europe’s top economy exported 113 billion euros (US$130 billion) of goods in August, adjusted for the season, a 1.2% drop on July, while imports were up 3.5% to 100 billion euros, according to the federal statistics agency Destatis.

For Germany’s export-driven economy the figures are a blow, and follow announcements this week that industrial orders and production, two key economic indicators, fell by 7.7% and 4%, respectively.

The drop in exports is the first since April 2020 when the pandemic caused figures to tumble by 23.6% after a 12% fall in March 2020.

Germany’s businesses had to prepare for a “difficult autumn”, said Joachim Lang, director general of the influential German industry lobby, the BDI.

“Difficulties in supply chains, high logistic costs and unresolved trade disputes have darkened the economic horizon and have a massive impact on exports,” Mr Lang said.

The upheaval caused by the pandemic has given rise to global shortages in components, such as semiconductors, timber and plastics, limiting production in key sectors for the German economy.

Carmakers including Volkswagen have scaled back production of their vehicles in response to the limited supply of computer chips, a crucial component in both conventional and electric vehicles.