Germany’s Exports Crumble in October

Europe’s largest economy and leading exporter, Germany, saw its exports fall -3.6% month-over-month in October, the sharpest decline since April. Economists were expecting a decline of -1.3% following a gain of 1% in September.

A German banker told CNBC:

We are seeing the beginning of a strong hit to German exports. It is telling that the exports fell by more than the imports. Domestic demand is stronger than that from abroad. It’s the euro crisis. If our neighbors aren’t doing well, Germany can’t remain an island of tranquility.

German exports to other Eurozone countries fell by -0.4%, while exports to non-Eurozone countries in Europe rose by 3.1% and exports to non-European nations rose 8.1%, on an annual adjusted basis. That wouldn’t be so bad, except that the majority of Germany’s exports are made to its Eurozone partners.

The possibility of a German recession is all too real:

While the country should still see economic expansion of 3 percent this year after a strong start to 2011, the government has nearly halved its forecast for 2012 growth to 1 percent. Berlin is now relying on domestic demand to shore up the economy.

One bit of good news is that German consumers have started spending more, driving up manufacturing and industrial output.