Excellent exports tally from the Germans

Good morning!

Yesterday, Germany’s Federal Statistical Office released the export tally for the country’s first 6 months.  The numbers are very positive.  Specifically exports were up 17.1% as compared with the first 6 months of 2009.  Additionally, the European Union Commission estimates that German gross domestic product growth will be 3.4% for 2010.  Recall that this number would be double the 1.7% economic growth expected for all of Europe.

Analysis: That Europe’s largest and most important economy is set to return to economic growth that is more becoming of a typical economic expansion period is an important sign.  There has been a lot of fear about the overall finances for the EU.  The only way to permanently allay those fears if for the individual European nations to generate positive and strong economic growth.  Because the German economy is the strongest and one of the most efficient (in terms of getting things done) in Europe, it serves as a leading edge indicator of EU health.  To me it looks like Europe is going to escape the most recent economic downturn without a second dip into recession.

Much of the German export growth was in the high double digits to developing countries such as Brazil, China and Turkey.  This also indicates that the Germans have emerged from the recession with a stronger roster of trading partners.  It also indicates that developing nations are emerging from the recession more strongly than they entered it.  This is because they are the nations placing big orders, not the first world countries that typically drive economic growth.  For the world’s economy this is a strong sign of developing robustness.

Importance grade: 9; nothing additional to add here.  Germany is Europe’s most important economy and it is growing at a nice clip.

Jason