News
23.05.2008The KME view: German exports - getting along with the weak Dollar?
The vulnerability of the German exporting industry caused by currency exchange rates, especially the Dollar to Euro rate, has decreased during the last years. Meanwhile around 80 per cent of German exports are accounted for in Euro and only some 13 per cent in Dollar.
One of the strength reasons is the fact, that the United States’ importance as a sales market has gone back (7.6 per cent of German exports), whereas exports to the four main Central and Eastern European markets - namely Poland, Russia, Czech Republic and Hungary - has risen to more than 11 per cent.
Germany’s main trade partners (in %), Source: FAZAnother reason not to be forgotten is the circumstance that three quarter of all foreign money claims resulting from exports are secured against currency decline.
The strength of the exporting German companies is in my view primarily due to the following five factors:
- the regional structure of sales markets (growing sales to Central & Eastern Europe, but also to China)
- the high importance of German investment goods for exports (e.g. in the sectors of mechanical engineering, electrical engineering and the car industry)
- the quality and the balanced profile of exported goods
- competitive pricing (production and labour cost having been cut down or at least kept stable)
- attractive services accompanying the German products, thus adding value to the offer
Although the Euro for the first time at the end of April 2008 jumped over the barrier of 1.60 Dollar experts still predict an export growth rate of 5 per cent for the running year 2008.
But attention: It is only if we are willing to keep a high speed of innovation that the country’s competitive position will remain stable on a global scale. The well known quality of the German “Messe” industry has to play a role in the globalisation game - may it be through leading events in Germany or through the continuous build up of quality trade shows abroad.
