Germany industries expect better 2012, despite euro crisis - survey

27 December 2011 17:08  [Source: ICIS news]

LONDON (ICIS)--Most German industry associations, including chemical trade group VCI, expect to see higher sales or higher production next year – despite a slowdown in the global economy and the eurozone debt crisis, a research group said on Tuesday.

Cologne-based Institute for Economic Research (IW) said 26 of the 46 German industry trade groups it polled expect their member firms to record higher sales or production in 2012, compared with 2011.

Another nine industry trade groups expect 2012 sales or production to remain broadly unchanged from 2011.

“Many [German] industrial sectors are in good shape and expect a positive 2012,” IW director Michael Huther said.

IW therefore currently rules out that Europe’s largest economy could see a sharp decline next year, Huther added.

The IW survey also found that 29 of the trade groups expect no change in investments among their member firms next year. As for employment, 31 trade groups expect stable numbers while only eight trade groups expect job losses, IW said.

However, Huther stressed that the continuing discussion about the eurozone debt problems and the fate of the euro could dampen prospects among firms and households.

Frankfurt-based chemical trade group VCI, in its survey response, reiterated its earlier forecast of 1.0% year-on-year growth in Germany’s chemical production.

Germany’s chemicals industry will see growth in 2012, but the pace of growth will be slower than in 2011, the group said. In 2011, Germany’s chemical production rose 4.0% year on year.

But VCI also warned that the debt crises in both Europe and the US are posing an increasing burden for the real economy, to the detriment of Germany’s chemical producers.

“There are increasing signs of a significant cooling of the global economy in 2012,” VCI said.

VCI expects Germany’s chemical producers to invest some €7.0bn ($9.1bn) next year, in line with 2011 investment volumes.

“Firms base their investment decisions on long-term prospects, and these are positive,” the group said.

As for employment, VCI said Germany’s chemical producers are not likely to add jobs next year, mainly because of the near-term uncertainties from the debt crises. Employment in Germany’s chemicals industry rose 2.5% in 2011 to 425,000.

The full IW survey is available, in German, on the institute's website.

($1 = €0.77)

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By: Stefan Baumgarten
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