Subsequent Effect of Europe Debt Crisis May Lead to Drop of Taiwan Exports to Germany

European debt crisis had a certain impact on German economy. Since Germany, accounting for one third of Taiwan’s fastener exports to Europe, is the main destination of Taiwan fastener export, if Germany falls into recession, it will influence the development of Taiwan’s fastener exports to Europe.

Export volume of fasteners in Taiwan last year was up to a record high mainly attributing to the increasing numbers of fasteners exported to Europe among which Germany played a dominant role. According to the figure, the numbers of fastener exports to Germany in the first five months of 2012 were 50.47 thousand tons marginally dropped compared to the same period in 2011 while the value of the exports to Germany in the first five months of 2012 was USD150 million, down 3% compared to 2011, which showed only a slight decline.

However, what’s worth noting is that German economy tends to slow down under the condition of the spread of the European debt crisis. Business Climate Indicator (BCI) in June in Germany fell to 105.3, down for the second straight month, the lowest since March 2010. It is estimated that Germany’s Q2 GDP will be stagnant or even plunge into recession. Some manufacturers pointed out once German economy falls, the numbers of fastener exports to Germany will also present a decrease. Thus, Taiwan’s entire EU market will perhaps become worse, thereby probably making a great impact on Taiwan’s entire fastener export market.