German Exports Post Unexpected Drop Despite Manufacturing Gains

2026-01-10 global

Wiesbaden, Friday, 9 January 2026.
November exports fell 2.5%, weighed down by weak US demand, overshadowing a surprise 0.8% rise in industrial output and signaling persistent challenges for Europe’s economic engine.

Divergent Economic Signals

Germany’s economic landscape presented a complex duality on Friday, January 9, 2026, as official data revealed a sharp disconnect between domestic manufacturing resilience and faltering international trade [1]. While the nation’s industrial engine showed unexpected life with production rising 0.8% in November 2025—defying forecasts of a 0.4% drop—the vital export sector contracted significantly [1]. Exports fell by 2.5% month-on-month to €128.1 billion, a decline that highlights the fragility of global demand for German goods [2][4]. This export slump, combined with a 0.8% rise in imports to €115.1 billion, caused Germany’s trade surplus to narrow sharply to €13.1 billion, down from €17.2 billion the previous month [2][4].

The Transatlantic Trade Chill

The most concerning headwinds for Europe’s largest economy are blowing from across the Atlantic. While the United States remained the top destination for German goods in November, the volume of trade is shrinking rapidly [2]. Exports to the U.S. dropped 4.2% compared to October, settling at €10.8 billion [2][4]. More alarmingly, on a year-over-year basis, exports to the U.S. have plunged by 22.9% [1][2]. Volker Treier, head of foreign trade at the German Chamber of Commerce (DIHK), characterized the relationship with the U.S. as “problematic,” noting that improved trade with other regions offers only “scant consolation” for the loss of momentum in this critical market [1].

Shifting Global Flows

As trade with the West stumbles, dynamic shifts are occurring in Germany’s dealings with the East. Exports to China managed a modest recovery, rising 3.4% in November to €6.5 billion [2][4]. However, the trade balance with Beijing remains heavily skewed; imports from China surged by 8.0% to €14.9 billion, reinforcing its status as the leading source of goods entering Germany [2][4]. Meanwhile, trade within the Eurozone showed signs of weakness, with exports to partner countries falling by 3.9% to €50.8 billion [2]. These figures suggest that while domestic demand for foreign goods—particularly from China—remains robust, the appetite for German manufacturing abroad is waning across multiple key markets.

Industrial Resilience or Temporary Blip?

Despite the gloomy trade data, the domestic manufacturing sector provided a surprise upside. The 0.8% rise in industrial production was bolstered by a 5.6% climb in industrial orders reported a day earlier on January 8 [1]. However, analysts are skeptical that this marks a permanent turnaround. Franziska Palmas, a senior Europe economist at Capital Economics, expressed doubt that this represents the start of a “sustained recovery,” citing significant structural headwinds that are likely to cause industrial output to decline in the medium term [1]. With the trade surplus shrinking and key export markets underperforming, the durability of this industrial uptick remains uncertain.

Sources

Manufacturing International Trade