German foreign trade is apparently already feeling the consequences of the corona crisis. The mood among German exporters deteriorated in March as never before: the barometer for export expectations of the industry plummeted from minus 1.1 to minus 19.8 points, like the Ifo Institute’s monthly survey of 2,300 companies announced.
This is the largest decline since reunification and the lowest since May 2009. “The corona pandemic is slowing global trade. International logistics is becoming more difficult,” said Ifo President Clemens Fuest. “Germany as an export nation is particularly affected.”
The prospects fell in almost all industrial sectors. It is particularly hard on the carmakers, who expect significant declines in exports. “The outlook is also bleak in mechanical engineering,” said Fuest. The same applies to the manufacturers of textiles and clothing. The declines in the manufacturers of electrical equipment and in the chemical industry were comparatively moderate.
For international merchant shipping, it is a good sign that the production of export goods in China will resume, said Alfred Hartmann, President of the Association of German Shipowners (VDR). In particular, container traffic between China and Europe could stabilize again. Nevertheless, the shipping companies see new problems coming up after more than ten years of crisis. “Now there are renewed, significant setbacks,” said Hartmann. “For some companies, the repayment of ship loans will already become a problem in the foreseeable future.”
For example, ferries to the German islands in the North and Baltic Seas or cruises are affected. How serious the effects are, however, cannot yet be assessed: “At the moment the situation here is too dynamic to make reliable forecasts.”
“Fear of losing a job has increased significantly”
In Germany, on the other hand, demand is also affected by the corona restrictions: consumer sentiment in Germany has fallen to the lowest level since the financial crisis. In its monthly consumer climate index, the Nuremberg market researcher GfK forecasts a decline of 5.6 points to 2.7 points in April.
Only in May 2009, at the height of the financial and economic crisis, was the index lower at 2.6 points. GfK consumption expert Rolf Bürkl said: “Such a sharp decline has been unprecedented since the consumption barometer was first created in 1994.” The propensity to consume “dropped” drastically, by 22.2 points to 31.4 points. A lower value was last measured in June 2013.
The threat of short-time work and rising unemployment also lowered income expectations: “The fear of losing a job has increased significantly,” said Bürkl. Retailers, manufacturers and service providers would have to prepare for a recession.
For its representative studies on the consumer climate, GfK collects around 2000 consumers per month on the economy, income and propensity to buy. For the April forecast, the market researchers surveyed consumers from March 4 to 16 – before closing shops and stopping production.