German Exporters Predict 2.7% Sales Decline in Bleak 2025

22 Jan, 2025

Around 80% of German businesses engaged in overseas trade anticipate a decline in sales this year, according to Germany's BGA trade association. The association has forecasted a 2.7% drop in turnover for 2025 compared to the previous year, reflecting a challenging outlook for Europe’s largest economy. BGA President Dirk Jandura described the outlook as "bleak," citing eroded trust in political leadership among small and medium enterprises as a contributing factor.

Another potential challenge for Germany’s export sector is the possibility of tariffs from the U.S., as proposed by President Donald Trump. Jandura advised businesses to remain calm and evaluate the situation before reacting, suggesting that Trump’s pragmatism may mitigate some of the anticipated risks. However, he acknowledged that such tariffs could lead to significant economic losses in the U.S. due to a surge in import costs.

The economic slowdown in Germany’s foreign trade sector is already showing its impact. Approximately 30% of surveyed businesses are planning to cut jobs, while orders and investments are on the decline. Insolvencies are rising, and 36% of businesses reported investing less in 2024 compared to the previous year. The BGA emphasized the need for policy changes to address these challenges, including infrastructure investment, reduced bureaucracy, and lower energy and labor costs.

Wholesalers are also facing a grim outlook, with two-thirds reporting declining sales in the second half of 2024. For 2025, 40% of wholesalers expect further sales declines. The BGA predicts stagnation in real terms for wholesale trade and a 0.5% nominal drop year-on-year. Jandura noted that foreign trade, once a reliable economic anchor, is now faltering and warned of prolonged difficulties without decisive policy intervention. Germany’s upcoming elections will be crucial in shaping the economic strategy to address these pressing issues.

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