FX.co ★ Germany braced for export crisis

According to estimates by analysts at the Munich Institute for Economic Research (IFO), Germany's industrial sector exports are expected to decline sharply over the next six months. What a nuisance! The export outlook for the German industry is in jeopardy.

Based on IFO experts’ assessments, Germany's export expectations index showed a downward trend in October, marking the second consecutive month of decline. The index fell to -6.5 points in September and sank by 0.2 percentage points to -6.7 in October. Analysts warn this downward trend will persist in the medium term.

Head of IFO Surveys Klaus Wohlrabe noted that German industrial companies are not benefiting significantly from the positive economic trends in other countries. Therefore, he predicts a challenging period for the German economy, with the industrial sector bearing the brunt. The automotive and metal industries are the most vulnerable, Klaus Wohlrabe added.

According to analysts, the German industrial sector has been going through a crisis for several months. Previously, experts from Germany’s Federal Statistical Office (Destatis) reported a 5.8% decrease in manufacturing output, way below the July level. Besides, the manufacturing sector shrank by 3.9% on a yearly basis. Analysts attribute this negative trend to several factors, including a significant drop in orders from eurozone countries.