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EU industrial production and German machine exports to the EU

The ranking of the ten most attractive EU countries for machine exports from Germany

The EU countries account for 49% of all machine exports from Germany (2017). Of these, ten EU countries alone account for over 80% of machine exports from Germany to the EU. A country's industrial production is one of the main determinants of machine exports and the use of machines. Therefore, this report compares the development of German machine exports to the ten EU countries with the development of industrial production in these countries. Another report examines the most important worldwide regions of the German machine export to what extent industrial production and machine exports are synchronized there.

July 18th, 2018 - The diagram for each of the ten EU countries compares changes in machinery exports from Germany with changes in industrial production in the country concerned. It compares changes, developments of the two variables in the period from 2008 to 2017, but not their absolute volumes.


Differences in the development of both variables are made directly visible as both variables refer to the pre-crisis year 2008 as a common starting point and are set to 100. This required a conversion of the official indices although without changing their context.

The ranking of the ten EU countries according to their attractiveness for machine exports from Germany

How can the ten EU countries be grouped according to their attractiveness for machine exports from Germany?


The diagrams compare the development stage of industrial production with that of machine exports from Germany for the year 2017 in relation to the year 2008.


In order to rank the ten EU countries in terms of their attractiveness for German machine exports, this report determines the deviation of each of the ten EU countries from industrial production on average for the entire EU and the deviation from machine exports from Germany to the entire EU.


Above-average developments in industrial production in one of the ten EU countries, above-average machine exports from Germany to one of the ten EU countries lead to positive deviations, below-average developments of both sizes result in negative deviations.


The deviations of each of the ten EU countries from the average of EU industrial production and from the average of German machine exports to the EU are multiplied (according to their amount by keeping their sign) together with the respective export quotas of machines from Germany to the respective country. The resulting ratio is positive for four EU countries and negative for six. 


The positive ratio of an EU country signals an above-average development of industrial production and German machine exports, whereby the export ratio serves as a weighting. This determines the attractiveness of this country for machine exports from Germany. According to this benchmark, the four most attractive export markets within the ten EU countries for machines from Germany in this ranking are the EU countries
   

  • Poland
  • Czech Republic
  • Austria
  • Belgium.


The export quota for German machines to these four countries amounts to 28%, which is a third of the 81% export quota to all ten EU countries. So within the ten most export-intensive EU countries, one third are attractive and two thirds show a negative indicator as a sign of below-average developments either in industrial production or in machine exports from Germany or both.


The six EU countries with negative indicators are in this order

  • Great Britain
  • Netherlands
  • France
  • Italy
  • Hungary
  • Spain.


The ten EU countries are treated in this order. But first a look at the development of industrial production in the EU and machine exports from Germany to the EU from 2008 to 2017.

EU industrial production in 2017 by 0.6%, German machinery exports by 7% above 2008 level

Industrial production in the EU exceeded its pre-crisis level of 2008 by a wafer-thin 0.6% in 2017. Exports of machinery from Germany to the EU in 2017 were 7% higher than in 2008.

Industrial production of the EU and the machine exports from Germany to the EU from 2008 to 2017.

The diagram shows the comparatively deep fall in machine exports in the crisis year 2009. It was not until 2014, five years later, that a dynamic increase in machine exports started to exceed the pre-crisis level of 2008, which finally happened with 100.3 index points, i.e. by 0.3%, in 2016.


Let us now take a look at the ten most export-intensive EU countries and then treat each of them in the order presented.

The ten most important EU countries for machine exports from Germany to the EU

These ten EU countries accounted for 81.1% of machinery exports from Germany to the EU (2017). In the order of the export quotas of machines from Germany in 2017, the countries concerned are
   

  • France (14%), Great Britain (10%), Italy (10%), Austria (9%), Netherlands (9%), Poland (8%), Czech Republic (7%), Spain (6%), Belgium (5%) and Hungary (5%).


A separate report examines the development of these export quotas and compares it with the total machine export from Germany from 2008 to 2017.


Let's start now with Poland, the most attractive EU market for machines from Germany according to the scale presented.

Poland's industrial production by 40% in 2017, machine exports by 29% above 2008 level

Poland and the Czech Republic increased their industrial production by far the most among the ten EU countries surveyed. At 40%, Poland's industrial production is well above average compared to its pre-crisis level of 2008.

Industrial production of Poland and the machine exports from Germany to Poland from 2008 to 2017.

Exports of machinery from Germany developed in line with this trend in Polish industrial production. At 29%, they were also well above the pre-crisis level of 2008.


This outstanding development of industrial production and German machine exports together with an export ratio of 8%, which ranks sixth among the ten EU countries with the highest export intensity, qualifies Poland as the most attractive export market for machines from Germany within the ten EU countries.

Czech Republic's industrial production by 18%, machine exports by 38% above pre-crisis levels

Czech Re√ľublic's industrial production developed above average and exceeded the pre-crisis level of 2008 by 18%.

Industrial production of the Czech Republic and the machine exports from Germany to Czech Republic from 2008 to 2017.

Machine exports from Germany topped this development by increasing twice as fast as industrial production and surpassing the 2008 level by 38%.


The machines from Germany to the Czech Republic show an export quota of 7%. Together with the clearly above-average development of industrial production and machine exports, the Czech Republic has become the second most attractive EU market for machines from Germany after Poland.

Austria's industrial production by 12%, machine exports by 9% above 2008 level

Austria's industrial production grew significantly faster than the EU average at 12% since 2008.

Industrial production of Austria and the machine exports from Germany to Austria from 2008 to 2017.

Machine exports from Germany to Austria accompanied this development in industrial production in line with the trend. They exceeded their 2008 level by 9% in an above-average increase compared to total machine exports from Germany to the EU at 7%.


With an export quota of 9%, Austria ranks fourth in the EU for machines from Germany. The combination of the above-average development of industrial production and machine exports, combined with the fourth highest export ratio, puts Austria in third place among the most attractive export markets for German machines.

Belgium's industrial production by 12%, machine exports by 11% above 2008 level

Belgium's industrial production, with 12% above 2008 levels, was well above the EU average in 2017.

Industrial production of Belgium and the machine exports from Germany to Belgium from 2008 to 2017.

Also machine exports from Germany followed this above-average development surpassing their 2008 level by 11%.


This clearly above-average development in industrial production and machine exports makes Belgium the fourth most attractive export market for machines from Germany, with a relatively low export ratio of 5% (ninth place).

UK industrial production by 5% below, German machinery exports by 5% above 2008 level

Industrial production in the UK has been in a permanent crisis since 2000, as a report shows. In 2017 it was again be 5% below its 2008 level and thus below the EU average.


The UK leads the following six EU countries with a negative indicator. This is the case, as mentioned, if the industrial production of the country concerned was below the EU average in 2017 compared to 2008 or if machine exports from Germany to this country in 2017 to 2008 were below the EU average or because both factors occurred together.

Industrial production of Great Britain and the machine exports from Germany to Great Britain from 2008 to 2017.

Like industrial production, machine exports from Germany to the UK also developed with an increase of 5% below average as the EU average is 7%.


With the second highest export ratio of over 10% for machines from Germany, Great Britain ranges still relatively favorable among the countries with a negative ratio.

Netherlands' industrial production by 3% below, machine exports by 18% above pre-crisis 2008 levels

Industrial production in the Netherlands was 3% below the level of 2008 and thus showed a below-average development. In 2010 and 2013, industrial production remained only just below its pre-crisis level, but could not exceed it.

Industrial production of the Netherlands and the machine exports from Germany to the Netherlands from 2008 to 2017.

In contrast to stagnating industrial production, machine exports from Germany developed above average by 18%. Together with an export quota of just under 9% for machines from Germany, the Netherlands ranks after Great Britain among the countries with a negative ratio, i.e. with deviations from the EU average for industrial production and machine exports.

French industrial production by 6% below in 2017, machine exports by 2% above 2008 level

Within the EU, France is with 14% the export country number one for machines from Germany and has maintained this position unchallenged since 2008.


Industrial production in France was 6% below its pre-crisis level in 2017, while industrial production throughout the EU was slightly above the 2008 level of 100.6 index points.

Industrial production of France and the machine exports from Germany to France from 2008 to 2017.

Machine exports from Germany to France also developed below average with an increase of 2%. Both negative deviations together with the highest export ratio put France in third place among the countries with negative deviations.

Italy's industrial production by 15% below, machine exports by 2% above 2008 level

Italy, together with Spain, is at the bottom of industrial production within the ten EU countries. In 2017 Italy's industrial production was still 15% below pre-crisis level, while industrial production in the EU as a whole was slightly above this level.

Industrial production of Italy and the machine exports from Germany to Italy from 2008 to 2017.

Exports of machines from Germany exceeded their 2008 level by 2%. Although this development in machine exports is below average, it is again "above average" in view of the sharp decline in Italian industrial production.


With an export share of almost 10% of machines from Germany, Italy is the third most export-intensive export partner within the EU. It ranks fourth out of six countries with negative differences.

Hungary's industrial production by 17% above, machine exports by 2% below 2008 level

Hungary's industrial production was by 17% above the 2008 level and also above the EU average of +0.6%.

Industrial production of Hungary and the machine exports from Germany to Hungary from 2008 to 2017.

The exports of machines from Germany were unable to take advantage of the steep rise in Hungarian industrial production to achieve an above-average growth. Machine exports from Germany to Hungary almost halved during the global economic crisis, while industrial production fell by 18%. With the exception of 2016, German machinery exports to Hungary rose since 2010 and this growth was largely in line with the development of industrial production - however too low to compensate for the comparatively lower crisis low.


This development, together with the relatively small export ratio of just under 5%, puts Hungary in fifth place out of the six countries with negative differences.

Spain's industrial production by 15%, machine exports by 19% below 2008 level

Spain's industrial production, like that of Italy, was by 15% below the pre-crisis level of 2008 and thus well below the EU average.

Industrial production of Spain and the machine exports from Germany to Spain from 2008 to 2017.

However, unlike Italy, machine exports from Germany to Spain did not increase as industrial production declined. Rather, their development was still lagging behind that of industrial production and closed 2017 with a minus of 19% compared to 2008.


Together with a relatively low export ratio of just under 6%, Spain ranks sixth out of the six countries with negative figures or differences. This makes Spain the least attractive EU country for machinery exports from Germany in 2017.

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