Germany: Revved-Up Dynamo

From the historic port city of Bremen, Aqua Signal is the world leader in the lights that big cargo ships use to keep from running into each other -- and a shining example of the kind of company that makes Germany the world's biggest exporter of manufactured goods. Aqua Signal's biggest foreign customers are Chinese and South Korean shipbuilders, yet the company still produces exclusively in Germany, profiting from a reputation for reliability that goes back to the days of four-masted schooners. "Customers are willing to pay a little bit more -- still," says Nickels Ackermann, a division head at the company, which also makes signal and interior lighting for ocean liners, pleasure boats, and aircraft.

Aqua Signal also helps shed light on the big economic surprise coming out of Germany this year. While overall 2004 economic growth is expected to be just 1.8%, German exports are forecast to rise an impressive 10.2%, compared with an average of 6.2% for all the countries that use the euro. At first glance the development makes no sense. After all, the euro is at an eight-month high, trading at $1.28. Theoretically, the strong euro should put German products at a severe price disadvantage in global markets, especially considering that labor costs are among the world's highest.