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Euro crisis subdues exports and economic activity in 1st quarter
May 20th, 2013 | Topic: News
According to the latest figures from the Federal Statistical Office (Destatis) the German economy only grew by 0.1 per cent in the first quarter of 2013. In addition, the economy contracted more strongly in the final quarter of last year than previously assessed at 0.7 per cent. In the opinion of the DIW Berlin the export sector is primarily responsible: “The crisis in the eurozone and the weak world economy have burdened German economic growth more strongly and longer than expected,” said the DIW Germany expert Simon Junker. As a result companies had also held back investments. He added that economic development was primarily being supported by private consumption expenditure.
The DIW Berlin remains optimistic for 2013: the institute expects continuing positive impulses from abroad, primarily from emerging markets. In the course of the year this should cause companies to use the cheap financing conditions to invest in equipment. The DIW Berlin expects noticeable growth in economic output, primarily in the second half of the year.
German industrial companies curb production
May 13th, 2013 | Topic: News
Due to falling demand and declining new orders industrial companies in Germany curbed their production in April for the first time since the start of the year. This is one of the results of the seasonally adjusted Markit/BME Purchasing Managers’ Index (PMI). Although the decline in production was low, it covered all three industrial sectors. Production volumes fell most strongly in the consumer goods industry, followed by capital goods. The lowest fall was posted by manufacturers of intermediate goods. The total PMI for manufacturing industry fell from 49.0 in March 2013 to 48.1 points now and was thus below the growth threshold of 50 points once again.
The various PMI sub-indices all declined in April. The downwards trend was particularly noticeable in purchasing prices. They fell to the lowest level since August 2009. Many raw materials became noticeably cheaper, especially steel and products based on crude oil. For the first time in three months industrial companies have also granted lower price discounts on their finished products. In the opinion of DIHK Chief Economist Dr Alexander Schumann, the clear decline in the PMI strengthened the picture of a weak start to the year with a subdued outlook for the rest of the year.
Fewer business founders in Germany
May 6th, 2013 | Topic: News
The interest in people founding their own business has declined further in Germany. This is shown by the new start-up report by the German Chambers of Industry and Commerce (DIHK). According to the investigation, the number of start-up discussions and consultations held by the Chambers of Industry and Commerce (IHKs) with people interested in starting their own business fell by almost a quarter on the previous year in 2012 to the record low of 252,229.
Analogously, according to the Bonn Institute for Mittelstand Research, at 346,000 last year there were also significantly fewer business start-ups than in 2011 (401,000). The DIHK sees the main reason for this decline to be the positive labour market development in Germany. Many people are thus remaining in permanent employment rather than taking the plunge into the uncertain path of self-employment. The DIHK expects the trend will also continue this year and that the number of start-ups in 2013 will be below the 2012 figure.
Employment in SMEs also stable in times of crisis
April 29th, 2013 | Topic: News
Employment in small and medium-sized enterprises (SME) in Germany also remains stable in times of crisis. This is the result of a current study by the Bonn Institut für Mittelstandsforschung (IfM, or Institute of SME Research) on employment in Mittelstand export companies, for which the researchers have evaluated official statistics for the years 2001 to 2009. Accordingly, the number of employees at all SMEs in Germany grew by 13.6 per cent between 2001 and 2009 – and even by 2.9 per cent in the crisis years 2008/09. In comparison: large companies reduced their employment by around 2.3 per cent in these two difficult economic years.
The IfM results also prove that SMEs – and niche providers above all – compensate for fluctuations in demand on domestic markets with export activities, thus stabilising employment. It is, however, large Mittelstand companies that are primarily active on foreign markets. In the IfM’s opinion this also confirms the basic assumption that tapping new markets contributes to reducing costs – and is thus interesting for companies above a certain size.
Weaker business situation but higher sales expected
April 22nd, 2013 | Topic: News
Just over half – 50.4 per cent – of small and medium sized enterprises in Germany assess their business situation as good or very good. This is the result of the Spring 2013 Creditreform survey on the economic situation and financing in the Mittelstand. One year ago it was even more at 58.6 per cent. In contrast, the proportion of companies expecting increasing sales has remained almost the same: it rose slightly from 37.6 to 38.6 per cent.
The balance of good and poor assessments of the business situations totals plus 47.1 points. This is the third highest level in the past ten years. In the good marks service companies lead the sector field with 55.3 per cent. In retail only 45 per cent of companies gave a good mark. Sales rose at a good fifth of SMEs; last year this was only the case at a quarter. In contrast, 28.6 per cent recorded a decline.
Capital resources in the German Mittelstand have also developed positively: for the first time in the Creditreform survey the proportion of companies with an equity ratio of more than 30 per cent of the balance sheet total was higher than the proportion of businesses with an equity ratio of below 10 per cent – 32.8 compared to 28.3 per cent. In manufacturing industry 40.7 per cent of businesses have an equity ratio of more than 30 per cent. In the construction sector, which traditionally tends to be weak in equity, there has been considerable growth from 15.2 to 20.7 per cent.