German companies operating abroad are more upbeat about the outlook than they were in the fall but there is little sign of a “genuine boom,” according to an industry lobby survey published on Wednesday.
(Bloomberg) — German companies operating abroad are more upbeat about the outlook than they were in the fall but there is little sign of a “genuine boom,” according to an industry lobby survey published on Wednesday.
The reasons for subdued confidence lie in structural challenges such as geopolitical uncertainties, a difficult financial environment due to rising interest rates, a shortage of skilled workers, and rising labor costs, according to the German Chamber of Industry and Commerce’s (DIHK) World Business Outlook.
Europe in particular is at a competitive disadvantage because of high energy prices, according to the survey of 5,100 German companies with operations abroad.
Instead of the strong upturn that was expected after three years of global crisis, companies see only a modest recovery, according to DIHK.
Even though positive business expectations in China remain intact, the discussion about a decoupling of the global economy is leading to a slight dip, Volker Treier, head of DIHK’s foreign trade board, said in Berlin.
Two-fifths of German companies in China expect a strong upswing in the next 12 months, while 19% expect a weaker economic trend. However, 29% of companies regard their business situation as good, with 22% seeing it as poor: This is a worsening trend compared with the fall survey, in which 32% described their situation as good and 18% as poor.
“Uncertainties surrounding future trade relations with China are also weighing on our local businesses,” Treier said. “The discussion about decoupling, that is breaking away from the Chinese market, is a blight on the China business of companies active there.“
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