Europe
German Exports Rebound amid Demand from the US, EU, and AI Buildout
- Germany’s surprising performance shows a shift in the export sector’s fortunes following a long period of relative weakness.
- Our economists forecast “robust” German real-export growth of 3.5% in 2026 and 2.4% the following year.
- Revived trade with the US and the EU, plus the global AI buildout, is expected to boost German exports.
- Competition from Chinese exporters, particularly in third markets, is still expected to weigh on German export performance in the medium term.
Germany’s exports increased in the first half of 2026 and are providing a modest boost to GDP growth in Europe’s largest economy, according to Goldman Sachs Research.
Our economists forecast that real exports will grow at a “robust” rate of 3.5% in 2026 and 2.4% the following year. Recent export strength reflects resilient foreign demand alongside modest, productivity-driven improvements in competitiveness.
Goldman Sachs Research expects German exports to increase, driven by revived trade with the US and the European Union, plus the global artificial intelligence (AI) buildout.
“Taken together, we are more optimistic about German export performance than at the start of 2026,” writes Niklas Garnadt, an economist in Goldman Sachs Research, in a report. Strong export performance in the first half of 2026 is consistent with healthy foreign demand and a modest improvement in relative unit labor costs, driven by stronger productivity growth.
Garnadt cautions that competition from Chinese exporters is expected to continue weighing on German exports in the medium term, especially in third markets.
Are German exports getting more competitive?
Still, the brighter outlook marks a shift for a sector that has been a drag on growth since the onset of the European energy crisis in 2022, writes Garnadt. Increases in relative unit labor costs and the real effective exchange rate have recently taken a toll on German competitiveness.
The near-term outlook for exports has “improved materially,” Garnadt writes. Survey-based, forward-looking export indicators have risen to their highest levels since the start of the European energy crisis. Hard data show that foreign manufacturing sales have risen since the start of the year, alongside a recovery in real goods exports. Foreign orders have increased even more sharply. This suggests further export growth in the quarters to come, according to Goldman Sachs Research.
What’s driving Germany’s export turnaround?
In addition to improved competitiveness, German exports to the US are recovering from the decline triggered last year by US tariffs. While exports in the second quarter remained materially below pre-tariff levels, the shortfall peaked in the second half of 2025 and has narrowed since then, writes Garnadt. Recent monthly economic data point to further improvement in the third quarter.
Trade with the EU is also rebounding after the slump that followed the energy crunch four years ago. “Since early 2025, EU trade has become a significant tailwind, reflected in rising manufacturing sales and orders,” writes Garnadt.
Demand for AI infrastructure boosts key German sectors
Thanks to the development of AI infrastructure worldwide, German computer, electronics, and electrical equipment companies are making meaningful contributions to export growth. AI-exposed goods have materially outperformed total exported goods over the past year, according to Goldman Sachs Research
There was also stronger growth in exports of chemicals and intermediate goods in the first half of 2026, perhaps reflecting precautionary purchases related to the closure of the Strait of Hormuz this year. Garnadt writes that this trend may partly reverse in the months to come. And Chinese competition will remain a challenge over the medium term.
Even so, Garnadt points out that Germany’s surprisingly positive performance in the first half of 2026 shows a significant shift in the export sector following a long period of relative weakness.
“Positive near-term indicators, productivity-driven competitiveness gains, stronger demand from Europe and the US, and spillovers from the global AI cycle point to healthy export growth ahead,” he writes.
This document has been prepared by the Goldman Sachs Executive Office and is not a product of Goldman Sachs Global Investment Research. The opinions and views expressed herein are as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only, and does not constitute investment, legal, or tax advice, a recommendation from any Goldman Sachs entity to take any particular action or be used as a basis for any other investment decision, or an offer or solicitation to purchase or sell any securities or financial products. Any forward-looking statements, case studies, computations or examples set forth herein are for illustrative purposes only. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third-party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only and is not used to imply any sponsorship, affiliation, endorsement, ownership or license rights between any such company and Goldman Sachs. This material should not be copied, distributed, published, or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs.
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