‘Recovery is here’, says German business

17th February 2004, Comments 0 comments

17 February 2004 , BERLIN - Powered by exports which are defying the rise in the euro, Germany's economy is now embarking on an upswing although domestic demand, investment and consumption remain weak points, one of the country's foremost business figures said Tuesday. Martin Wansleben, head of the German industry and commerce federation DIHK in Berlin, said a survey of more than 25,000 firms showed a brightening mood in the corporate landscape and prospects for gross domestic product growth of up to 2 per

17 February 2004

BERLIN - Powered by exports which are defying the rise in the euro, Germany's economy is now embarking on an upswing although domestic demand, investment and consumption remain weak points, one of the country's foremost business figures said Tuesday.

Martin Wansleben, head of the German industry and commerce federation DIHK in Berlin, said a survey of more than 25,000 firms showed a brightening mood in the corporate landscape and prospects for gross domestic product growth of up to 2 percent this year.

"The economic recovery is here," he said in remarks published by the DIHK accompanying the spring survey results.

The DIHK spring survey coincided with Tuesday's release by the Mannheim-based Centre for European Economic Research of its ZEW index showing a drop in investor confidence. The index fell to 69.9 points from to 72.9 points in January.

Wansleben, in his remarks about the DIHK survey, also noted that domestic investments remained a weak point in the German economy, along with private consumption and employment. At the very most, the pressure on firms to reduce payrolls was expected to diminish in the course of the year, he said.

Prospects of GDP growth of up to 2 percent would be contingent on the dollar not permanently remaining low, the DIHK chief executive said, while also noting that this year special calendar effects would boost the economy.

"The expansion of production this year is based in part on the special effect of four additional working days," Wansleben said. "So at the core, the economic upswing is less than indicated by the overall economic growth rate."

Nor would the upswing this year be of much benefit on the job market.

"On the contrary, we are calculating an average loss of 100,000 job positions," Wansleben said.

The DIHK survey found a clear improvement in companies' views compared with its fall 2003 survey. Overall, 32 percent of German firms see better business ahead, as against 29 percent last fall.

At the same time, 22 percent see poorer business ahead, down from the 25 percent who responded negatively in the fall of 2003.

The DIHK survey showed companies to be more upbeat about their export prospects despite the impact of the euro's rise. The spring 2004 survey showed 42 percent now expecting to boost their exports, as against 39 percent in the fall 2003 survey.

Only slight changes - but for the better - were seen in company attitudes on their payrolls, the DIHK said. The spring survey said 10 percent of firms expected to boost their employment, as against 8 percent last fall. At the same time, 30 percent expected to lower their payrolls, compared with 31 percent in the fall 2003 survey.

"The survey results make it clear: At the outset of 2004, many companies are doing better," Wansleben said.

 

DPA
Subject: German news 

 

 

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