German firms optimistic regarding exports, survey shows

A majority of German businesses are optimistic that their exports will continue to grow despite the conflict in the Middle East, according to a survey released on Wednesday.

A total of 83% of German firms polled by insurer Allianz Trade said they expect revenue from exports to increase this year, compared to 75% businesses surveyed globally.

Markets reacted extremely favourably to the two-week ceasefire agreed between Iran and the United States overnight, Allianz executive Björn Griesbach noted.

"If the ceasefire holds, traffic and trade through the Strait of Hormuz would pick up significantly," he said, while warning that economic risk "is by no means off the table."

German export businesses remain concerned regarding US trade, with 49% expecting negative fallout from US President Donald Trump's tariff policies to persist this year, Allianz Trade said.

Only Chinese businesses are more pessimistic regarding business with the US, with 50% voicing negative expectations.

"The resilience of German exporters is being challenged by major risks," said Griesbach, with geopolitical uncertainties and supply chain risks currently the most frequently cited concerns.

Exports might be boosted by a number of EU trade agreements that are set to be concluded, Griesbach noted.

The Mercosur deal with four South American countries and an agreement with India are expected to bring the most gains, while a pending trade deal with Australia is of strategic interest as it could help secure raw material supplies such as lithium.

Germany's ifo Institute, a leading economic think tank, estimates that the agreements could lead to a permanent increase of 0.43% in EU economic output.

Around 6,000 companies were surveyed worldwide for the Allianz poll between February and March.