Sharpest Decline in German Exports in Two and a Half Years

German exports recorded the sharpest decline in two and a half years in February, according to data from the federal statistical office released on Monday, following a series of indications that the period of accelerated growth for the largest European economy may have come to an end.

Seasonally adjusted exports fell by 3.2 percent in February compared to the previous month, marking the largest decline since August 2015, according to the Destatis report.

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Imports also fell, by 1.3 percent compared to January.

This brought the seasonally adjusted trade surplus in the second month of this year down to 19.2 billion euros, its lowest value since the beginning of last year. In January of this year, it was 21.4 billion euros.

‘Blame’ the Strong Euro

– It seems that the peak of economic activity is behind us, notes HSBC Trinkhaus analyst Lothar Hessler, speculating that the stronger euro is likely ‘to blame’ for the decline in exports.

– The German economy will continue to grow, but at a slower pace, he estimates.

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Andreas Scheuerle from DekaBank assesses that the data outlines a disappointing picture for the first quarter in the German economy.

– It is difficult to pinpoint the reasons for the weak start to the year as the good conditions for the economy have not changed in the past three months, says Scheuerle, noting that record employment and wage growth create a favorable environment for domestic demand.

He also adds that the protectionist threats from U.S. President Donald Trump are likely not the main reason for the decline in German exports in February.

German companies are concerned about the potential impact of the U.S.-China trade war on their business.

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Thus, the Chamber of Commerce and Industry (DIHK) stated last week that an escalation of the dispute over import tariffs could harm the global economy and dampen demand for German goods and services.

Last week’s report from the German Ministry of Economy and Energy showed the largest decline in industrial production in February in over two years. The industry is losing momentum, the ministry noted.