The German economy — the workhorse of European growth since the financial crisis — has rediscovered its mojo.
Following a recent report of rising industrial orders and output, the next thunderbolt came on Monday: For the first time in history, German exporters sold more than €100 billion ($130 billion) worth of goods abroad in a single month.
The export total for July — €101 billion — set a record but even after accounting for seasonal effects, Germany set an adjusted record for a single month of €98.2 billion. Exports rose in adjusted terms by 4.7 percent from June.
At the same time, imports dipped by 1.8 percent from the previous month.
In light of the strong start to the third quarter, fears of a slowdown subsided. The statistics show that exports to the United States have more than offset losses to crisis-torn Ukraine and eastern Europe.
“Any loss in exports to geopolitical crisis regions, especially to Russia and Ukraine, were overcompensated by strong export of goods to other export markets,” said Johannes Mayr of German bank BayernLB.
In the second quarter, Germany’s gross domestic product fell by 0.2 percent. The main reason was the let down after a surprisingly strong first quarter, when economic growth was boosted by the unusually mild winter.
In July, exports grew to all of the largest economic regions. In the euro zone, they rose by 6.2 percent, in the rest of the European Union, exports rose 15.9 percent. In non-E.U. countries, exports rose 7.2 percent.
“Any loss in exports to geopolitical crisis regions, especially to Russia and Ukraine, were overcompensated by strong export of goods to other export markets,” said Mayr of bank BayernLB. Most of all, rising U.S. demand played an important role.
Holger Schmieding, an analyst at Berenberg Bank, remained cautious.
In the state of Lower Saxony, the summer holidays came especially late this year, which meant that workers spent the entire month of July working at Volkswagen, the largest car manufacturer in Europe. He said it is likely that there will be a counter reaction in industrial output and exports in August.