BERLIN: German exporters expect stronger demand from abroad due to the weaker euro, with carmakers and chemicals companies especially upbeat, a survey showed.
The euro hit a seven-month low of $1.0589 on Wednesday.
Potential further policy easing by the European Central Bank, which meets next week, could weigh further on the euro, especially if the US Federal Reserve raises its benchmark interest rate at its Dec. 15-16 meeting as is widely expected.
“German industry appears more optimistic again with regard to future exports,” said Hans-Werner Sinn, head of the Munich-based Ifo economic institute.
“The weakness of the euro is a support here,” he added. Ifo’s index for export expectations jumped to 7.5 points in November after dipping to 5.9 points in October.
“The main drivers were the automobile sector and the chemicals industry,” Sinn said, adding engineering firms also expected foreign demand to pick up in the coming three months. On the downside, electronics and pharmaceuticals companies said they expected exports to decline in the next three months.
German export growth nearly came to a halt in the third quarter of this year due to weaker demand from China, Russia and other emerging markets, making net foreign trade a drag for growth in Europe’s largest economy.
But rising private consumption and higher state spending on refugees more than compensated for the export weakness, helping the German economy to grow at a modest, albeit slower, pace of 0.3 percent in the third quarter.
In a separate statement, the Berlin-based DIW economic institute said on Wednesday it expected growth to pick up at the end of this year, with gross domestic product (GDP) expanding by 0.4 percent on the quarter between October and December.
From January through September, exports to the United States and Britain surged partly thanks to the weaker euro, helping German companies to offset waning demand from China and Russia.
Fitting into this picture, the VDMA engineering association said on Monday the United States displaced China as Germany’s top export market for machinery in the first nine months.
