Germany’s export sector showed renewed signs of strain in November, with overseas shipments falling unexpectedly, even as domestic industrial output recorded a third straight monthly increase, highlighting the uneven and fragile nature of Europe’s largest economy’s recovery.
Official data released Friday by the federal statistics office showed German exports declined 2.5% in November from the previous month, defying expectations of flat growth in a Reuters poll of analysts. The drop was driven largely by weaker demand from key markets, including other European Union countries and the United States, underlining how external headwinds continue to weigh on what was once Germany’s primary growth engine.
“This once again underscores how much this former growth engine of the German economy has begun to sputter,” said Marc Schattenberg, an economist at Deutsche Bank Research, pointing to the structural challenges confronting exporters amid slowing global trade and shifting geopolitical alliances.
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The weakness in exports contrasted with a modest but notable improvement in domestic industrial activity. Industrial production rose 0.8% in November, beating expectations for a 0.4% decline and marking the third consecutive month of growth. Economists have been watching the production data closely for signs that Germany’s prolonged manufacturing downturn may be bottoming out after months of contraction.
“The prolonged downturn appears to have come to an end,” Schattenberg said, adding that the view was supported by a recent rise in incoming orders.
That assessment gained support a day earlier when data showed German industrial orders jumped 5.6% month-on-month in November, buoyed by large-scale contracts. The rebound in orders has offered some relief to manufacturers struggling with high energy costs, weak foreign demand, and lingering uncertainty around global trade rules.
Still, the sustainability of any recovery remains in question. Economists cautioned that improving factory figures may prove short-lived given tougher trading conditions, particularly those stemming from U.S. tariff policies under President Donald Trump.
Exports to both the United States and EU member states fell 4.2% on the month in November, while overall exports to non-EU countries declined 0.2%. On an annual basis, the picture was even more stark. Exports to the U.S. plunged 22.9% compared with November 2024 on a calendar- and seasonally-adjusted basis, underscoring how sharply trade relations have cooled.
“The relationship with our most important export market, the U.S., also remains problematic in the new year,” said Volker Treier, head of foreign trade at the German Chamber of Commerce DIHK. “It is only scant consolation that China is once again taking over the role of our most important trading partner.”
A 15% tariff on most EU goods agreed with the Trump administration in July has weighed heavily on shipments to the U.S., curbing demand for German cars, machinery, and industrial equipment. At the same time, Washington’s tariffs on Chinese imports have had a knock-on effect in Europe, diverting Chinese exports toward EU markets.
Friday’s data showed German exports to China rose 3.4% in November, while imports from China surged 8.0%, reflecting that shift in global trade flows. The stronger inflow of goods contributed to a narrowing of Germany’s trade surplus, which fell to 13.1 billion euros ($15.26 billion) in November, down from 17.2 billion euros in October and 20.0 billion euros a year earlier. Overall imports increased 0.8% on a calendar- and seasonally-adjusted basis.
The narrowing surplus underscores how Germany’s traditional trade model has come under pressure, as export growth falters and imports remain resilient. For an economy long reliant on foreign demand, particularly from advanced industrial markets, the change marks a significant adjustment.
Skepticism remains widespread among economists about whether the recent uptick in production marks a turning point. Franziska Palmas, senior Europe economist at Capital Economics, said the improvement seen around the turn of the year may not last, given the broader trade backdrop and longer-term structural constraints.
“Given the significant structural headwinds facing the sector, we doubt this is the start of a sustained recovery and still expect German industrial output to decline in the medium term,” Palmas said.
Together, the figures paint a picture of an economy caught between tentative domestic stabilization and mounting external pressures. While factories may be showing early signs of life, Germany’s export-dependent model remains exposed to tariffs, geopolitical tensions, and shifting global demand patterns that continue to cloud the outlook for Europe’s biggest economy.