German Exports to Slow on Euro, Cooling World Growth

By Andreas Cremer

July 29 (Bloomberg) -- Companies in Germany, the world's biggest exporter, face slowing sales abroad this year and next as the stronger euro and a cooling global economy curb demand, the DIHK chambers of industry and commerce said.

Export growth will slow to 7 percent in 2008 and to 6 percent in 2009 from 8.5 percent last year, the Berlin-based DIHK said today in an e-mailed statement, citing a survey of German companies operating in more than 80 countries.

``The weakening world economy and the strong euro will take their toll'' on German exports, Stefan Bielmeier, an economist at Deutsche Bank AG in Frankfurt, said by phone. Bielmeier said he expects sales abroad to slow to 4.4 percent next year.

Exporters are grappling with the euro's 15 percent appreciation against the dollar in the past 12 months which is eroding competitiveness just as a U.S.-led slowdown and record oil prices cool the world economy. German sales abroad fell the most in almost four years in May, the Federal Statistics Office reported July 9.


The U.S. will further lose importance as a destination for German exports, said the DIHK, which represents about 3.6 million companies. U.S.-bound German sales as a share of total exports will probably shrink to 6.7 percent by 2009 compared with 8.8 percent in 2005, it said.

``The U.K. may surpass the U.S. next year as the second most important market for German exports'' behind France, the DIHK said. It would be the first time since 1997 that the U.S. relinquished that position, Axel Nitschke, head of the DIHK's foreign trade department, told reporters in Berlin today.

Trade Surplus

Germany's foreign trade surplus may rise to above 200 billion euros ($315 billion) this year and to 215 billion euros by 2009, compared with 197 billion euros last year, Nitschke said.

World trade growth may slow to 6.3 percent this year and 6.6 percent in 2009 from 7.1 percent last year, the DIHK said. Imports to Germany may increase 7.5 percent this year compared with 5.2 percent in 2007 as the stronger euro makes goods sold to Germany cheaper. Import growth may slow to 6.5 percent next year.

The DIHK company survey, conducted in May and June, forecasts the world economy will expand 4.8 percent in 2008, the same pace as last year. Global economic growth may weaken to 4.6 percent in 2009, it said.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.