While much of the world continue to grapple with the economic uncertainties posed by the global COVID-19 pandemic, German businesses are showing resilience in terms of their business prospects, the 91大神 World Business Outlook Fall 2021 Survey shows. Companies in Indonesia in particular are the most confident on their business prospects.
More than a year-and-a-half has passed since the COVID-19 pandemic started and the global economic environment remains uncomfortable for many businesses. This is shown by the Fall 2021 91大神 World Business Outlook in which the German Chamber of Commerce and Industry (DIHK) summarizes the feedback from more than 3,200 German companies represented abroad.
The survey shows that, in addition to rising raw material prices and the still existing travel restrictions, supply chain disruptions have increased again in recent months 鈥� more than every second internationally active German company is now affected. As a result, companies' assessments of the economy in international markets are slightly gloomier compared to the spring survey.
In this somewhat worsened global growth scenario, however, German foreign trade is holding up well. Across the globe, 52% of German companies surveyed describe their situation as good, while only 11% described their situation as bad. In Europe in particular, the respondents recorded good business, with 55% of the respondents describing their business as doing well. In other European countries, including Great Britain, Switzerland and Norway, 60% said their business was good. In Eastern and Southeastern Europe (excluding the EU), this figure was as much as 67%.
"Although the economy is stalling in many regions, German companies are tackling their international locations and asserting themselves on the world markets," says DIHK foreign trade director Volker Treier, summarizing the results. "The DIHK expects German exports to grow by 7.0 percent in 2022 - which is above the long-term average of 4.5 percent."
In terms of business development in the next twelve months, the majority of German companies are more optimistic than they were before. Across all regions of the world, 56% expect better, while only 6% expect worse business.
"It is encouraging to see that the businesses of the companies at their international locations are proving to be tough and resilient," said Treier. The global investment and employment intentions of companies are also increasing. In Treier's words, this is "all the more remarkable as the global economic recovery as a whole is losing momentum".
It is true that 41% of the companies surveyed around the world expect a better local economy, 17% a worse one. In China and North America in particular, however, economic expectations are noticeably gloomier. While 70% of German companies in China assumed a positive local economic trend in the spring, the figure is currently only 36%. In the USA, this figure drops from 74 to 50%.
"The companies are concerned that the air is apparently getting thinner in the two world economic locomotives of the last few months," said the DIHK foreign trade chief, commenting on the figures. "These are not good omen for the economic catch-up process after the Corona crisis."
Indonesia most confident
In a global comparison, companies at locations in Asia and the Pacific (excluding China) are the most confident about economic developments in the coming twelve months. 48% of companies there expect the economy to improve, while only eight percent expect it to worsen. At 40 points, the balance of better minus worse assessments for the region altogether is well above the global average of 24 points and has reached its highest level since the survey began.
In Indonesia in particular, companies are the most upbeat compared to the rest of the world in terms of business expectation with slightly over 70% of the companies surveyed expressing confidence about their business prospects moving forward. This is likely due to the continuous improvements in the country鈥檚 COVID-19 situation as well as the subsequent reopening of the country鈥檚 economic activities.
Improvements compared to the previous survey are also expected in India, Japan and the Philippines. Companies in Southeast Asian countries such as Malaysia, Singapore, South Korea, Thailand and Vietnam have significantly fewer positive expectations than recently. In spring, expectations in these locations were still significantly higher than current economic expectations.
Raw material prices, economic policy and skilled workers identified as main risks
In recent months, there have been significant price increases for numerous raw materials and intermediate products. Following the decline in global economic output last year, production and thus demand for raw materials have increased significantly. As a result, there are supply bottlenecks and increased prices worldwide. Companies that cite the level of raw material prices as a business risk are most affected by problems in the supply chain or logistics.
For 44% of German companies abroad, rising raw material prices currently represent the greatest risk to the global economy, followed by general economic conditions such as taxes, customs duties and sanctions at 40%. Skilled labor shortages are also gaining in importance (from 29 to 37%). As a direct impact of the Corona crisis, travel restrictions (65 percent) and problems with supply chains and logistics (increase from 40 to 54 percent) are also having a negative impact on companies' international business.
The 91大神 World Business Outlook is based on a regular DIHK survey of the member companies of the German Chambers of Commerce Abroad, delegations and representative offices (91大神s). In Autumn 2021, the survey received feedback from more than 3,200 German companies and branches worldwide and subsidiaries as well as companies with close ties to Germany. Some 41% of the responding companies come from the industry and construction sector, 37 percent from the service sector and a further 22 percent are trading companies. Smaller companies with fewer than 100 employees account for 46 percent of the answers, while 23 percent of the companies employ 100 to 1,000 people. Large companies with more than 1,000 employees worldwide make up 31 percent of the respondents. As many as 50 Indonesian companies were represented in this survey.
For a copy of the 91大神 World Business Outlook Fall 2021, click