German industry's export expectations continue to worsen

Source: Xinhua | 2019-10-31

The German industry's export expectations have "clearly deteriorated" for the third time in a row, according to an industry survey conducted by the Association of German Chambers of Commerce and Industry (DIHK) and published on Wednesday.
The survey was based on the responses of around 28,000 German companies, which have been the most pessimistic since the 2008/2009 financial crisis, according to the DIHK.
Based on the negative export outlook of German businesses, the DIHK lowered its gross domestic product (GDP) growth forecast for Germany from 1.7 percent to 0.4 percent for 2019.
DIHK President Eric Schweitzer called on the German government to implement an "internationally competitive" corporate tax rate of 25 percent and demanded investment in infrastructure.
In 2020, the country's GDP growth may slightly increase to 0.5 percent, mainly because next year there will be four more working days than this year.
According to the DIHK, growing protectionism in several markets, escalating trade conflicts as well as Brexit were the leading causes of the German companies' weak export expectations.
"In normal times," the average growth rate of German exports would be 5.5 percent, said Schweitzer, adding that he expected exports to at least stagnate or even decrease by up to 0.5 percent in 2020.
As a result of the pessimistic outlook and uncertainty in several sectors, the German companies' investment and employment intentions were weakening for the fifth time in a row. According to the DIHK, from the companies' point of view "the greatest business risk remains the shortage of skilled workers."
The German economy requires at least 260,000 skilled immigrant workers per year by 2060 to counter the declining labor supply caused by the country's aging population, a study conducted by the Bertelsmann Foundation found.
The German industry in particular saw expectations deteriorate "considerably" because of uncertainties around the economic framework conditions with regard to climate and energy policies.
The German retail and tourism industries, on the other hand, both benefited from "reliable domestic consumption" and continued to look forward to stable business, according to the DIHK.