China manufacturing slowdown hits demand for German electricals
[MUNICH] German electrical exports to China fell the most in more than 3 1/2 years in August as a manufacturing slowdown in the world's second-biggest economy curbed spending on new equipment.
China bought 1.2 billion euros (US$1.4 billion) of electrical gear from Germany that month, 9.6 per cent less than a year earlier, the Frankfurt-based ZVEI electrical industry association said in a report on Wednesday. That's the lowest amount since Jan 2012. Total electrical exports still rose 4.1 per cent to 12.9 billion euros.
"I'm loathe to spread panic," Andreas Gontermann, the ZVEI's chief economist, said by phone. "We knew this slowdown was coming." The electrical industry was Germany's biggest exporter last year after the automotive sector, and includes behemoths such as Siemens AGand Robert Bosch GmbH as well as much of the Mittelstand: the small- and medium-size businesses which the economy ministry calls the "engine of the economy." China was the biggest destination for the industry's goods in 2014, accounting for 9 per cent of the 166 billion-euro total, according to the ZVEI. U.S. sales overtook China in the first eight months of this year.
China's gross domestic product rose 6.9 per cent in the three months through September from a year earlier, the National Bureau of Statistics said Monday. That's the slowest quarterly expansion since 2009, with a growth in services offsetting the tapering manufacturing sector.
Siemens Chief Executive Officer Joe Kaeser warned in July that China's economic development was a "concern" for Europe's largest engineering company. Siemens supplies equipment such as conveyor belts and pumps to increase factory automation, as well as gear to generate and distribute energy, and it also derived 9 per cent of its sales from China last year.
BLOOMBERG
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