By Ed Frankl


Germany's exports increased in May, driven by U.S. trade, as manufacturers proved relatively resilient to uncertainty prompted by the Iran war.

Seasonally adjusted exports from Germany were 0.9% higher than in April, reaching 137.9 billion euros ($157.4 billion), the highest level since September 2022, statistics agency Destatis said Thursday. Economists polled by The Wall Street Journal expected a 0.6% decline.

Exports to the U.S. rose 23% on month, or 15% compared with the same month of last year. Exports to China rose 7.1% on month, but those to the European Union dropped 1.1%.

"Exports are being buoyed by the continued growth of the U.S. economy," ABN AMRO Germany's chief economist Alexander Krueger said. Despite subdued expectations by exporters due to the conflict in the Middle East, exports will likely post solid growth in the second quarter of the year, he added.

Industrial production in Europe's largest economy also rose in May, figures published earlier this week showed, suggesting German manufacturers are managing the fallout from the Iran war. Some of that resilience may come from companies front-loading orders of German goods to get ahead of expected supply-chain difficulties and price rises due to the war.

Imports to Germany sank 2.5% on month, which, given the rise in exports, meant the country's seasonally adjusted trade surplus rose to 19.1 billion euros in May, from 14.7 billion euros in April, Destatis said.

The fall in imports is surprising given the surge in oil prices, which would have lifted the nominal value of energy imports, according to Pantheon Macroeconomics chief Eurozone economist Claus Vistesen.

"It's possible that the surge in energy prices [was] a deterrent to imports, with domestic inventories used [as] a buffer," he said in a note to clients.

Brent crude prices surged after the outbreak of the war, but fell back to prewar levels in June as tensions eased and President Trump announced an agreement to end the fighting. Oil prices climbed again on Wednesday after Trump declared the ceasefire "over."


Write to Ed Frankl at edward.frankl@wsj.com


(END) Dow Jones Newswires

07-09-26 0431ET