Germany is the United States' largest European trading partner and a key market for global shippers. The German economy is the fifth largest in the world and with 82.4 million people, the largest consumer market in the Europe. The German market is a cornerstone around which many businesses build their supply chains, component material and parts supply flow and global sales strategies.
Given its importance to the US and global economies, it’s critical to understand the current economic situation in Germany and likely future outcomes. The German economy has been stagnant for more than a year. The manufacturing sector rose slightly in what has been a downward trend and the service sector remained unchanged. Exports rose in September, while business confidence remained unchanged. Consumer confidence is down, despite domestic demand remaining strong with some retail growth and a stable labor market.
The driving factors behind business and consumer confidence seem to be the uncertainty related to Brexit, trade tensions and a potential global slowdown.
Economists have been cautious in downplaying the current slowdown. Few foresee stagnation or a true recession on the horizon. Many predict growth rates of around .5% and a return to normal after an interim boom, despite concerns about deeper structural issues in Germany’s auto industry.
While global trade tensions, Brexit and potential U.S. tariffs on European autos could continue to contribute to uncertainty in this critical market, the general outlook on Germany’s economy is positive. Exports should pick up next year, industrial production should begin to recover and domestic demand is likely to remain resilient.
Janel has extensive experience in this trade lane. In addition, we operate dedicated weekly inbound and outbound air and ocean freight consolidations to/from all major points in Germany. To leverage our deep understanding of this marketplace or for additional information please contact John Haran – jaharan@janelgroup.com