There was an unexpected fall in exports from Germany in May, another indicator of a slowing economy.

The export decline of 1.8 percent compared to April, was the steepest in nine months. Year-on-year exports were up by 1.6 percent.

Imports also rose less than expected; they were up just 0.1 percent, pointing to subdued domestic demand in Germany

These are further signs that weak global demand for German products is hitting growth in Europe’s largest economy.

Underscoring that, German exports to the rest of the eurozone went up compared to May last year.

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“German export development is sluggish so far this year,” DIHK foreign trade director Volker Treier said. Trade with European Union countries was the only reason unadjusted exports rose 1.6 percent on the year in May, he said.

“Outside the EU, there is hardly any growth potential due to global crises and low oil prices.”

The slump in exports and the slight rise in imports means the seasonally-adjusted trade balance narrowed. It was 22.1 billion euros in May down from April’s 24.1 billion euros.

The disappointing trade figures come just days after the release of stats showing German industrial output posted its biggest monthly drop in nearly two years. In addition industrial orders were weaker than expected.

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Germany’s economy grew by 0.7 percent in the first quarter of 2016, its strongest quarterly rate in two years. Soaring private consumption, higher construction investment and state spending on refugees more than offset a dip in trade.

Donald Trump’s spectacular journey from Trump Tower to the White House appears not to have had any impact on the German economy to date.

However, it may take sometime for the ripples or waves to hit Berlin.

The general consensus is that uncertainty and pessimism,
two ingredients that induce allergies in the financial sector, are the order of the day, tomorrow and many years to come.

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Klaus Wohlrabe is an IFO economist:“Right now we are not seeing a huge impact on the result of our poll after Trump’s election. After the Brexit vote there was a two-month delay. That’s when we noticed an increase in uncertainty. This could happen again, that companies will become more sceptical or more cautious in December. After all, Trump’s remarks are very erratic, meaning that we first need to see what is actually implemented from the things he announced during the election campaign.”

In the third quarter the German economy halved to 0.2 percent as a result of weak foreign trade.

In contrast private consumption remained on an upward trend with consumers happy with high employment, wage rises and low interest rates.

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German government spending is contributing to growth as the country accommodates more than one million migrants who have arrived since the start of 2015.

German businesses are gloomier this month. A regular survey of some 7,000 firms in Europe’s largest economy showed morale unexpectedly dropped.

It was previously at its highest level in almost three years.

The United States is Germany’s most important single export destination and President Donald Trump’s protectionist comments have unsettled German politicians and business leaders.

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But economist Klaus Wohlrabe at the Ifo research institution, which carried out the surveys, said the weaker morale does not seem to be linked to the new man in the White House: “So far Donald Trump has had no effect on the current surveys, which surprised us because his remarks would indicate not such a good mood, or sentiment suffering in the German export industry. But surprisingly, export expectations rose, and for now, that sentiment is still very optimistic. But of course nothing concrete has been decided so far.”

Dampener

Others were not so sure. Dekabank economist Andreas Scheuerle said: “It did not even take a week for US President Trump to put a dampener on the mood of German companies.”