AHK World Business Outlook Spring 2020

AHK World Business Outlook Spring 2020 Results of the Survey by the Network of German Chambers of Commerce Abroad (AHKs)

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2 | AHK World Business Outlook – Spring 2020

Summary The global economy and thus the business of German companies abroad are in a substantial crisis. Two thirds of the more than 4,000 companies surveyed by the AHKs worldwide expect the economy to deteriorate in the respective countries. Especially in Europe and North America, German companies are assuming a dramatically worsened economic development. Half expect their businesses to decline in the next twelve months. Many want to reduce their investments and cut personnel.

Economic expectations of the Companies worldwide Balance in points 40 20 0 -20 -40

As a direct consequence of the spread of the corona virus, 80 percent of German companies abroad ex-60 pect their sales to decline. 15 percent of the compa2015 2016 2017 2018 2019 2020 nies even assume that their annual sales will more than halve. The lower demand for the products and services, but also travel restrictions, the cancellation of trade fairs or the cancellation of orders are a problem for the companies.

The greatest risk for companies in the next twelve months is the demand for goods and services. After around half of the companies in the preliminary survey in autumn 2019, there are now more than two thirds who see this as a major challenge for the further development of the business. However, the economic policy framework and the topic of financing - due to many business closings and the currently high and growing need for liquidity - are high business risks for German companies abroad.

The AHK 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 (AHKs). In spring 2020, it collected feedback from more than 4,000 German companies, branches and subsidiaries, as well as companies closely related to Germany.

38 percent of the responding companies come from the industrial and construction sector, 41 percent from the service sector and a further 21 percent are trading companies. Smaller companies with fewer than 100 employees account for 52 percent of the answers. 24 percent of the companies employ 100 to 1,000 people.

Large companies with more than 1,000 employees also account for 24 percent of the respondents.

3 | AHK World Business Outlook – Spring 2020

German companies abroad Balance in points 60 40 20 0

business situation employment expectations

-20 -40

investments

-60 Spring 2015

Spring 2016

Spring 2017

Spring 2018

Spring 2019

Spring 2020

Economic expectations of companies worldwide In percent

Other EU, NO, CH, UK 67

North America 81 16

29 Euro Area

3

South America

China

8

15

7 Asia/Pacific 68

54 18

9 35

Better

20

30

78

Africa / MENA

73

49

South-/East Europe

72 20

3

Unchanged

26

11

Worse

6

4 | AHK World Business Outlook – Spring 2020

Sales changes as a result of the coronavirus pandemic in percent

No assessment possible Increased sales No changes

Decline of more than 50%

3

Decline of up to 10%

12

9

6 Decline between 10% and 25%

31

14

25 Decline between 25% and 50%

Impact of the coronavirus pandemic on businesses Travel restrictions

69%

Less demand

58%

Cancellation of orders

48%

Investments are postponed or cancelled

47%

Cancellation of trade fairs or events

47%

Problems in the supply chain or logistics

45%

Liquidity bottlenecks

33%

Missing goods or services

29%

Own production losses or sickness absence Miscellaneous

22% 3%

5 | AHK World Business Outlook – Spring 2020

Risks for the global economy in the coming twelve months in percent

demand

54 45

economic policy financing

22 23

trade barriers / preference of domestic companies labour costs

20

exchange rate

19

legal certainty

14

lack of skilled workers

14 12

energy and commodity prices infrastructure

9

17

11

Imprint Deutscher Industrie- und Handelskammertag e. V. Association of German Chambers of Commerce and Industry (DIHK) Department for International Economic Policy Publisher and Copyright © Deutscher Industrie- und Handelskammertag | Berlin | Brussels DIHK Berlin Mailing Address: 11052 Berlin | Street Address: Breite Straße 29 | Berlin-Mitte Phone: (030) 20 308-0 | Fax: (030) 20 308 1000 DIHK Brüssel Street address: 19 A-D, Avenue des Arts | B-1000 Brussels Phone: ++32-2-286 1611 | Fax: ++32-2-286 1605 Internet www.dihk.de www.facebook.com/DIHKBerlin http://twitter.com/DIHK_News Editor Ilja Nothnagel, Melanie Vogelbach, Kevin Heidenreich Graphics Lola Machleid Pictures https://www.gettyimages.de/

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49

37 28

26 29

22 33

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