German companies are not optimistic of a pickup in Europe’s biggest economy, a survey conducted by the Association of German Chambers of Industry and Commerce showed.
Responses from among 21,000 firms questioned revealed a notable lack of momentum after two quarters of no growth at all, the association said.
“Companies have shown remarkable resilience despite persistently high energy prices, rising interest rates and the war in Ukraine,” association chief executive officer Ilja Nothnagel said in a statement yesterday.
Photo: AP
“However, the outlook for the next 12 months remains murky — especially since incoming orders are noticeably decreasing on the demand side,” Nothnagel said.
The group maintained a prediction for zero growth this year, an outlook that is more pessimistic than the 0.2 percent expansion forecast on Monday last week by the European Commission.
The report comes amid a week focusing on the health of the German economy, with surveys of purchasing managers and the Ifo Institute’s gauge of business confidence due in coming days, which economists have broadly predicted would show deterioration.
On Thursday, a second GDP estimate would show whether unexpectedly weak industrial production has pushed the country into a recession in the first three months of this year.
Most economists have said they think the economy stagnated rather than shrank.
The Bundesbank would tomorrow release its monthly report to update investors on its view of growth, while Bundesbank President Joachim Nagel is scheduled to deliver key speeches this week.
The association’s survey showed that energy and raw materials prices remain the biggest risk for companies, while a shortage of skilled workers is the next-highest danger.
That, along with inflation, means that more than half of respondents saw labor costs as a threat.
“In view of the aging of society, the lack of qualified workers will remain one of the main structural challenges for companies in the future,” Nothnagel said.
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