Corona, Trump, Brexit, car demand – 2020 with many challenges
In April and May of last year all export markets collapsed overnight, the Upper Franconian industry sold around a third less than usual abroad. Foreign trade stabilized again unexpectedly quickly, however, in December 2020 even more was exported than in the same month last year, according to the IHK for Upper Franconia Bayreuth in a current analysis.
The corona pandemic left a clear mark on Upper Franconian exports in 2020. Although Upper Franconia had already recorded a slight decline in foreign sales before the Corona crisis, the sharpest slump since the financial crisis of 2009 followed in the 2nd quarter of -24.4 percent.
The Upper Franconian export economy quickly recovered
Sara Franke, Head of International
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The Upper Franconian export economy recovered comparatively quickly from the pronounced slump in demand and the collapse of the supply chains in April 2020. “After a minus of 28 percent in April and 31 percent in May, the situation stabilized again in June. But it wasn’t until November and December that exports returned to the previous year’s level, ”says Sara Franke, Head of International.
Practically all industries recorded this trend; sometimes stronger, sometimes weaker. The development in the glass and ceramics sector was completely different: this sector recorded an export increase of around 40 percent in the first and third quarters and an increase of 15 percent in the second quarter. In return, sales collapsed by 27 percent in the fourth quarter.
Automotive suppliers particularly affected
Viewed over the year as a whole, Upper Franconian foreign sales fell by 10.5 percent to 11.4 billion euros. Above all, the automotive suppliers and clothing manufacturers contributed to this development with a significant export decline of over 20 percent. Furniture manufacturers, manufacturers of chemical products and mechanical engineering follow closely behind, with exports falling by over 15 percent over the whole year. “2020 was a difficult year for the automotive and clothing industries worldwide, and the Upper Franconian economy is unfortunately no exception,” said Franke.
However, not all sectors recorded a decline in exports. The manufacturers of glass and ceramics were able to export 14.8 percent more in the past year than in 2019. The manufacturers of textiles (+2.6 percent) and the producers of other goods (+3.9 percent) were also able to increase their exports.
2021 with a weak start
Franke: “The export engine started to stutter again at the beginning of 2021, and it wasn’t until March 2021 that the Upper Franconian economy recorded a noticeable increase again with a plus of 14 percent, primarily driven by the motor vehicle suppliers.”
Bavarian exports declining across the board in 2020 – only a few countries exported more than in the previous year
The decline in exports in 2020 was not limited to Upper Franconia, as the IHK for Upper Franconia found in an analysis. In some countries, the Bavarian economy was able to expand its position despite the difficult framework conditions. Overall, however, the export volume fell by 11.3 percent.
The export development of Bavaria was something of a roller coaster ride in 2020. If the first quarter was burdened by the weak exports of the motor vehicle industry, the export figures generally plummeted in the second quarter, only to stabilize again comparatively quickly. In December 2020, Bavarian industry recorded an increase in exports for the first time since December 2019. Overall, Bavarian exports fell by 21.4 billion euros compared to 2019 to 168.2 billion euros.
More exports to Turkey, Lithuania or Uganda
The trading partners in the various countries contributed to the recovery to varying degrees. While exports to China, Hungary and Poland were already above the previous year’s level again from the third quarter, the recovery of trade relations with other countries, such as Norway, the UAE and Ireland, took longer. “Exports to the USA, Great Britain, Italy and Japan also stabilized in the second half of the year, but recorded a negative trend over the entire year,” says Sara Franke, Head of International at the Chamber of Industry and Commerce for Upper Franconia Bayreuth. The development of exports to Turkey, Lithuania or Uganda is completely different: here exports rose even in the second quarter, the height of the export crisis. Overall, Bavarian exports have fallen back to 2013 levels.
“2020 has shown that resilience in supply chains can pay off in both directions, because not all countries were equally affected by the effects of the corona at the same time. We are happy to support companies that want to position themselves more broadly internationally, ”said Franke.
USA remains the leading buyer country
Despite the big slump in exports to the USA, the country remains the largest buyer of Bavarian exports with 17.2 billion euros, ahead of China (15.7) and Austria (13.2). In 2020, the UK fell one place to 6th as a customer country, Japan from 14 to 17, Turkey climbed from 20 to 18 and Taiwan from 28 to 23. The Czech Republic remains in 9th place among the customer countries.
Some significant shifts since 2010
Since 2010 there have been some shifts in the importance of the buyer countries, surprisingly the United Kingdom is not included. Although exports to Great Britain have fallen by 5.1 billion to 10.2 billion euros since 2015, this loss of importance was preceded by high increases of 5.9 billion euros since 2010.
In the past decade, Spain (from 8th to 12th place), Brazil (from 20 to 28), Singapore (from 22 to 31) and Iran (from 40 to 71) in particular have fallen behind. Exports to Syria, Afghanistan and Venezuela in particular fell, not really surprising given the local situation.
On the other hand, China (from 3rd to 2nd of the most important customer countries), Poland (from 12 to 7), Romania (from 25 to 19), Malaysia (from 32 to 24) and Mexico (from 33 to 22) have become more and more important ). Cambodia even managed to make up 65 places on rank 84.
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