path navigation

German companies abroad defy flattening global economy

World Business Outlook Fall 2021
bunte Containerstapel

How is the foreign business of German companies doing? The AHKs surveyed their members

© olaser Creative / E+ / Getty Images

The current situation is good, but the outlook is disappointing. The Association of German Chambers of Commerce and Industry (DIHK) considers the recovery process to be significantly weakened and does not expect a sustainable, investment-driven upswing. Above all, the factors of energy prices, raw material supply bottlenecks and a shortage of skilled workers are the greatest risks. These are the results of the current DIHK business survey in which around 28,000 companies participated.

The challenges for German companies abroad are numerous more than a year and a half after the start of the coronavirus pandemic. Most recently, the economic recovery has lost pace in parts of the world: Only two out of five of the more than 3,200 companies surveyed worldwide still expect the economy in their respective countries to develop better over the next twelve months. This means that expectations are more subdued than they were in spring 2021. While German companies expect the economy to improve compared with the previous survey, particularly in the Asia-Pacific region (excluding China), Africa and the Middle East, as well as in the European Union (EU), expectations in China, North America and South and Central America have fallen significantly. In terms of their own businesses, however, companies in their international locations are proving resilience. In many places, for example, companies expect a further revival of their own activities despite the cooling economy. Significantly more companies than in the spring therefore intend to increase staff and investment expenditures at their foreign locations over the next twelve months.
However, given the existing challenges posed by the coronavirus pandemic, companies are on a rocky road. Travel restrictions and problems in the supply chains and logistics are preventing smooth business operations and an overall self-sustaining, investment-driven upturn in international business. In this context, the proportion of companies reporting a lack of goods and services as well as their own production stoppages has once again increased significantly compared to the previous survey.
Irrespective of the immediate effects of the coronavirus pandemic, raw material prices currently represent the greatest business risk for German companies abroad. The shortage of skilled workers has once again gained in importance and represents a considerable risk for companies' employment plans outside Germany as well.


About World Business Outlook

The AHK World Business Outlook is based on a regular DIHK survey of member companies of the German Chambers of Commerce Abroad, Delegations and Representative Offices (AHKs). In autumn 2021, it collected feedback from more than 3,200 German companies, branches and subsidiaries worldwide, as well as companies with close ties to Germany.
41 percent of the responding companies are from the industry and construction sector, 37 percent from the service sector and another 22 percent are trading companies. Smaller companies with fewer than 100 employees account for 46 percent of the responses. Twenty-three percent of businesses employ 100 to 1,000 people. Large companies with more than 1,000 employees worldwide account for 31 percent of respondents.

Contact

Porträtfoto Carolin Herweg
Carolin Herweg Director fundamental issues of Foreign Trade and Development Policy