Germany looks set to record solid GDP growth this year and in the medium term will continue to grow at a faster pace than the economy recorded during the build-up to the global financial crisis. While stronger domestic demand will play an important role, export growth is likely to accelerate too.

Top Five Hotlist Export Destinations
Rank 2013 2030
1 France China
2 UK France
4 China USA
5 Poland Poland
  • The TCI has remained stable with the majority of respondents still expecting trade conditions to improve over the next six months.
  • The metals sector will see its share of total exports steadily decline, despite strong growth of exports to emerging markets.
  • More generally, France and the UK will remain important trading partners. But China will eventually become Germany’s largest export market

Current trade position

The TCI continues to point to an expansion in the volume of trade over the next six months. Although the strength of the euro is a growing worry, respondents have become less concerned about lack of product demand, credit conditions or low margins/profits as barriers to expanding trade.

Spotlight: Metals

Why Metals are important

Not only is Germany the EU’s largest producer of metals, it provides vital inputs for Germany’s machinery and automobile sectors. Over 50% of metals exports are accounted for by iron and steel.

Trade in Metal goods for Germany (2014-30)

Simon Cooper, Chief Executive of HSBC Commercial Banking.

“Businesses can’t afford to fixate on the risks posed by today’s geopolitical problems and uneven rates of growth at the expense of their future planning. Conditions have undoubtedly been tough for trade recently, but we are now turning a corner. The medium and long term prospects look significantly better for businesses that have prepared themselves for recovery in both developed and developing markets.”

Key findings

Metals exports will continue to expand over the coming years, but at an unremarkable pace; between 2020 and 2030, export growth will only be around 2% a year. In the nearer term, strong competition and over capacity in some parts of the world will limit growth. Moreover, the fact that Germany’s largest markets are in the slower-growing EU economies will also hold back growth. Accordingly we expect the metals sector’s share of total exports to fall from about 7% currently to around 5% by 2030.

Export growth to the emerging markets will be stronger than headline growth. In particular, exports of metals to China, Malaysia and India are expected to grow at a rate of 5% a year or more in the medium term.

Short-term snapshot


Around two-thirds of the respondents to the survey anticipate trade flows to expand over the next six months, broadly unchanged from the results of the previous survey. The main expected driver of the increase is higher demand both globally and in key markets.

HSBC Trade Confidence Index (TCI)

The latest survey revealed the TCI remained unchanged at a level of 108, despite some growing pessimism about the ability to access trade finance. The TCI remains high by recent standards. The strong euro also weighed on the index–the proportion of respondents indicating that the exchange rate would have an unfavourable effect rose relative to the last survey.

HSBC Trade Confidence Index

Cross-border business

Just under 40% of respondents considered Asia to be the region with the best opportunity for business growth, unchanged from six months ago. But the number of respondents considering Europe to be the most promising region for business also rose to around 35%. This was offset by increased pessimism towards Latin America.

Regional export flows

Corridors of choice

  • A concern is that 6% of respondents cited Russia as the country that they conduct most trade with, implying that growing tensions in the Ukraine could be a major worry. But the strong importance of fast-growing Asia as a trade partner bodes well.
  • Almost a fifth of respondents expect government regulations to have an unfavourable impact on trade over the next six months.
  • But some encouragement can be drawn from the fact that fewer respondents now cite a lack of product demand, credit conditions or low margins/profits as a major barrier to expanding trade.

Opportunities for business

Export growth to Europe looks set to be weak by global standards in the years ahead, implying that Germany will need to export more beyond the continent to generate strong export growth. Asia, which respondents consider to be their second most import trade region after Europe, is expected to see the strongest increase in exports over the next decade.

Longer-term outlook

Expectations for the global economy

Over recent years, Germany has reaped the benefits of past structural reforms and wage restraint that allowed it to improve its competitive position. This, combined with its specialism in the export of machinery, is likely to ensure that it is in a strong position to benefit from investment-focussed growth in the emerging economies.

Corridors to watch

Germany’s traditional key trading partners – France, the UK and US – will remain important export destinations for Germany, but with exports to Emerging Market economies likely to rise more quickly over the next couple of decades, the relative importance of these developed markets will decline.

By 2030, China’s share of exports will have more than doubled from its current rate, to about 10%. The share of exports to Asia, excluding Japan and China, will rise from its current level of about 4% to 6% by 2030, making it a bigger destination than France, the UK and the US.

Industrial machinery and transport currently account for around half of total export growth, and are expected to contribute around two thirds of export growth over the next decade. The chemical sector will also remain an important export sector. From the perspective of imports, industrial machinery and transport equipment will remain the biggest single sector, reflecting the high import content of production in the sector.

Germany’s projected sector contribution increase in merchandise exports

Focus on Metals

  • The metals sector accounts for about 7% of goods exports and Germany is the EU’s leading producer.
  • Exports will rise over the next couple of decades, but at a slower pace than total merchandise exports, partly reflecting strong competition in the sector and excess global steel capacity.
  • In addition, the bulk of metals exports go to other EU economies, where overall GDP growth will be weaker than the global average. As a result, by 2030, metals exports are expected to account for just 5% of total exports.
  • The emerging world will be the most rapidly expanding destination for Germany’s exports of metals, with growth to China, Malaysia, India and Vietnam expected to be the most robust.


Germany’s specialism in high quality machinery and its strong trade links with Asia mean that the export sector, which has tended to be the main growth engine for the economy, will continue to perform strongly. This should help ensure that it remains one of the Eurozone’s strongest economic performers.

About the HSBC Trade Forecast – Modelled by Oxford Economics

Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade for total exports/imports of goods, based on HSBC’s own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods, and balances between 180 pairs of countries. Oxford Economics produces a global report for HSBC, as well as country specific reports on the following 23 countries: Hong Kong, China, Australia, Indonesia, Malaysia, India, Singapore, Vietnam, Bangladesh, Canada, USA, Brazil, Mexico, Argentina, UK, France, Turkey, Germany, Poland, Ireland, UAE, Saudi Arabia, and Egypt. The analysis also includes trade with Japan and Korea for a total sample of 25 key trading nations.

Oxford Economics employs a global modelling framework that ensures full consistency between all economies, in part driven by trade linkages. The forecasts take into account factors such as the rate of demand growth in the destination market and the exporter’s competitiveness. Exports, imports and trade balances are identified, with both historical estimates and forecasts for the periods 2014-16, 2017-20 and 2021-30. Sectors are classified according to the UN’s Standard International Trade Classifications (SITC) system at the two-digit level and grouped into 30 sector headings. More information about the sector modelling can be found on

About the HSBC Trade Confidence Index:

The HSBC Trade Confidence Index is conducted by TNS on behalf of HSBC in a total of 23 markets, and is the largest trade confidence survey globally. The current survey comprises six- month views of 5,200 exporters, importers and traders from small and mid-market enterprises on: trade volume, buyer and supplier risks, the need for trade finance, access to trade finance and the impact of foreign exchange on their businesses. The fieldwork for the current wave (11) was conducted between May - July 2014 and gauges sentiment and expectations on trade activity and business growth in the next six months.

Sector Focus – Methodology

This report also includes special sections on key industries – agriculture, energy, metals, pharmaceuticals, technology and textiles. Based on the same underlying forecasts used for the existing analysis of trends in bilateral trade flows, the report examines how exports/imports of these groups of products are expected to evolve over time. The definitions used in the report for each of these sectors are below:


·Live animals (SITC code 00)

·Meat and meat preparations (SITC code 01)

·Dairy products and birds' eggs (SITC code 02)

·Fish, crustaceans, molluscs (SITC code 03)

·Cereals and cereal preparations (SITC code 04)

·Vegetables and fruit (SITC code 05)

·Sugars, sugar preparations and honey (SITC code 06)

·Coffee, tea, cocoa, spices (SITC code 07)

·Feeding stuff for animals (SITC code 08)

·Other edible products (SITC code 09)

·Beverages (SITC code 11)

·Tobacco (SITC code 12)


·Coal, coke and briquettes (SITC code 32)

·Petroleum and petroleum products (SITC code 33)

·Gas, natural and manufactured (SITC code 34)

·Electric current (SITC code 35)


·Metalliferous ores and metal scrap (SITC code 28)

·Iron and steel (SITC code 67)

·Non-ferrous metals (SITC code 68)

·Other manufactures of metals (SITC code 69)


·Medicinal and pharmaceutical products (SITC code 54)


·Office machines and automatic data-processing machines (SITC code 75)

·Telecommunications equipment (SITC code 76).

·Electrical machinery and appliances (SITC code 77)

·Professional, scientific and controlling instruments and apparatus (SITC code 87)

·Photographic apparatus and optical goods (SITC code 88)

Textiles and Garments

·Textile fibres (SITC code 26)

·Textile yarn, fabrics, made-up articles (SITC code 65)

·Travel goods, handbags and similar containers (SITC code 83)

·Articles of apparel and clothing accessories  (SITC code 84)

·Footwear (SITC code 85)

This document is issued by HSBC Bank plc. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. The views and opinions expressed by contributors are their own and not necessarily those of HSBC Bank plc. Under no circumstances will HSBC Bank plc or the contributors be liable for any loss caused by reliance on any opinion or statement made in this document.