According to Reuters, Germany’s exports and industrial output both posted stronger-than-expected gains in March, offering a glimmer of optimism for the country’s struggling manufacturing sector, though the uplift may prove short-lived as U.S. tariffs loom.
According to recent data released by the federal statistics office, exports rose by 1.1% month-on-month, edging past expectations of a 1.0% rise in a Reuters poll. Imports, by contrast, fell by 1.4% during the same period. The resulting trade surplus widened to €21.1 billion ($23.9 billion), up from €18.0 billion in February.
A notable driver of March’s export growth was demand from the United States, which surged by 2.4% month-on-month. Analysts say American buyers rushed to make purchases ahead of sweeping tariffs announced by Washington — a move likely to significantly impact German industry in the months ahead. The U.S. remained Germany’s largest trading partner in 2024, with bilateral trade reaching €253 billion.
Exports to the EU also recorded a 3.1% increase, while shipments to non-EU countries dropped 1.1%. China, however, emerged as a bright spot outside the bloc, with exports to the country jumping 10.2%.
On the production front, German industrial output rose 3% in March from February, far exceeding the 0.8% increase forecast by economists. The broader picture also showed signs of recovery, with production in the first quarter of 2025 up 1.4% compared to the final quarter of 2024.
“This is more than just statistical noise,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank AG. “After more than two years of recession, there’s likely a cyclical upswing taking hold — a positive signal for the months ahead.”
Further bolstering hopes, industrial orders rose 3.6% in March, indicating a potential revival in demand after a prolonged slump.
Still, experts warn the uptick could be temporary. “March’s outturn confirms that conditions in German industry have at least stopped deteriorating,” said Franziska Palmas, senior Europe economist at Capital Economics. “But any boost from tariff front running is likely to fade soon.”
Palmas noted that the sector continues to grapple with structural issues such as waning global competitiveness and declining demand for traditional automobiles — a key pillar of German manufacturing. “We wouldn’t be surprised to see German industrial output contract again in the next six months or so,” she added.
