Recent German export data shows Europe's biggest economy may be on the road to recovery. Growing economic potential in the developing world could be beneficial to Germany.
For a long time Germany's position as the world's largest exporter was uncontested, but the country lost that title two years ago - China and the US both now export more goods than Germany.
But that's no reason to grieve, thinks Anton Börner, president of Germany's Foreign Trade Association (BGA). "We are among those who profit most of all from the economic boom in Asia," he said. "We're being pulled along by Asia's growth."
While Europe is increasingly losing importance as a market for German products, the significance of Asian markets is rising. Should this trend continue, Börner told a news conference in Berlin, the importance of Europe and Asia for the German economy will be almost equal by 2040.
"We should celebrate when the economic potential in our foreign trade markets increases," he said. That means the need for high-end products is on the rise, too. "If a Chinese person has a higher income, he can more easily afford a German car."
Worldwide, the demand for German products remains strong, and German exporters expect a record year despite the European debt crisis and a lull in the economy.
The Federal Statistics Office reported Tuesday that exports rose 1.6 percent from January on February in seasonally adjusted terms. The provisional data showed exports in February valued at 91.3 billion euros ($119.4 billion). Compared to figures from one year earlier, exports were up 8.6 percent.
BGA president Börner is optimistic the surge will continue. He predicted an average increase in exports this year of six percent, equalling a full-year figure of 1.12 trillion euros, while imports are expected to rise by seven percent to 965 billion euros.
Emerging markets like 'Made in Germany'
The trade association sees growth potential in Southeast and East Asia, South and North America, the Mideast - and Africa. "The emerging markets are barely burdened by the debt crisis and continue robust investments in future technologies," Börner said.
Exploding population rates are characteristic for emerging markets - making it vital for countries to invest in technologies for energy and resource efficiency as well as traffic, construction and telecommunication infrastructure. This is not true only for the so-called BRIC states (Brazil, Russia, India and China), Börner said , but also the "next eleven," which include Turkey, Egypt, Indonesia, Iran, Mexico and West African and Arab states that abound in natural resources.
Europe loses significance
The world's emerging markets also offer German businesses ample opportunities in the export of services, the BGA chief said.
"Engineering and IT services are particularly relevant," he said. "Germany has seen the most successful start-ups in the post-war era in these areas." He predicted services in the care and health sectors would also be in higher demand in the coming years.
In view of these developments, it is not surprising that the significance of Europe as a market for "Made in Germany" products is waning. Last year, German exports to other EU countries dropped from 65 to 59 percent, and slumped within Europe from 75 to 71 percent. The negative trend was most noticeable in Greece and Italy, where German exports dropped by 13 and 10 percent respectively - clearly a result not only of current austerity measures but also of a more reserved attitude on the part of consumers and investors.
Author: Sabine Kinkartz / db
Editor: Ben Knight