Germany’s export sector is concluding the year on a muted note, with only a marginal improvement in sentiment observed recently, according to the latest data from the Ifo Institute. The Ifo’s export expectations edged up to -3.1 points in December, a slight recovery from November’s -3.8 points, but failing to signal a robust turnaround.
“The export economy is closing the year disappointingly” stated Klaus Wohlrabe, head of Ifo surveys. “The outlook for the first quarter of 2026 remains subdued. A genuine revival of exports is proving elusive.
The data reveals a distinctly uneven performance across key German industries. The traditionally stalwart automotive and engineering sectors are exhibiting widespread caution, with expectations firmly pointing towards declining export volumes. This hesitancy underscores the ongoing challenges posed by global economic uncertainties and shifts in consumer demand. The food industry anticipates a downturn as well, although at a less severe rate than previously forecast, hinting at a potential stabilization in some segments.
Conversely, optimism prevails within the manufacturers of electronic and optical products, projecting growth in overseas business. This divergence highlights areas of adaptation and potential competitive advantages within the German economy. Similarly, beverage producers are experiencing an uptick, with their export indicator reaching its highest level since April.
However, the initial euphoria witnessed amongst manufacturers of electrical equipment earlier in the year has faded, replaced by expectations of only modest export gains. This cooling reflects a more pragmatic assessment of the global economic landscape and the limitations of relying on speculative demand.
The ongoing sluggishness of German exports raises critical questions regarding the broader health of Europe’s largest economy and its ability to navigate increasingly complex geopolitical and economic headwinds. The data is likely to intensify calls for structural reforms and proactive government policies aimed at bolstering export competitiveness and diversifying markets, particularly as Germany grapples with demographic challenges and the ongoing transition toward a greener economy.