German exports dropped by 0.9% month-on-month in July, from +0.2% MoM in June. At the same time, imports increased by 1.4% MoM, from -3.2% MoM in June. The trade balance narrowed to 15.9bn euro, from 18.7bn euro in June.
From last summer until the start of this year, German exports were extremely volatile. Since then, exports have stagnated and seem to be basically going nowhere. Trade is no longer the strong resilient growth driver of the German economy that it used to be.
Since the beginning of 2022, net exports have been a drag on the economy in four out of six quarters. Supply chain difficulties, a more fragmented global economy and China increasingly being able to manufacture goods it previously bought from Germany, are all factors affecting the German export sector.