Germany just had its worst month of exports since the financial crisis

German exports just racked up their worst most in six and a half years.

Exports are still up 5% on the year, but fell by 5.2% month-on-month in August.

That’s the worst monthly performance since January 2009, when the world was still gripped by the financial crisis and subsequent global recession.

In nominal terms, that’s a seasonally-adjusted slump of €5.4 billion ($US6.07 billion, £3.97 billion) dragging monthly exports back below the hundred billion euro mark for the first time since March.

Without employing the seasonal adjustment, exports fell by a much larger proportion, tumbling by €19.2 billion ($US21.6 billion, £14.10 billion) or 18%.

The figures are for August, so the plunge came before any potential effect from Volkswagen’s emissions scandal, which didn’t break until late in September.

Here’s what Sean Darby and Kenneth Chan of investment bank Jefferies had to say before Thursday’s figures were released:

The macro impact of the VW emissions scandal should not be underestimated given the strength of German auto sales to date. Moreover, the German auto industry employs around 775,000 people while German exports of autos and components dominate the lion’s share of goods. It is hard to estimate the overall costs given the expense for recalling cars, the impact of tougher regulations and harm to the German engineering brand let alone the fines. The emissions scandal comes at a tough time for Europe given the overall refugee challenge for Germany and its neighbours. One of seven jobs in Germany are linked to the auto industry.

It’s a pretty grim outlook given the headwinds that the country’s exporters are already facing.

Earlier in the year, it looked like the euro was plunging towards parity with the dollar — but around March that ground to a halt, and the euro has since strengthened a little. For anyone buying German goods from abroad, a stronger euro makes them more expensive.

The German economy has also benefited more than most from the rise of China’s middle class — the emergence of huge demand for quality cars and industrial equipment has boosted the country’s outward trade.

But the recent slowdown in the Chinese economy has caused some understandable concern — economists are increasingly doubtful as to whether the world’s second-biggest economy can reach its own growth targets in the years ahead.

In fact, if economists like Michael Pettis and Citi’s Willem Buiter are correct, China’s potential growth rate in the years ahead is more like half of the 7% it’s currently recording. For German companies that have been enjoying the rapid climb of Chinese demand, that slowdown could prove bumpy.

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