Survey issues warnings for growth, employment and profits in Germany
Output of goods and services is on average expected to fall slightly over the next 12 months, while firms have signalled their intention to cut workforce numbers for the first time in ten years.
Concerns about future profits are meanwhile reflected in a negative outlook for capital spending (capex).
The latest report, which asked around 800 German manufacturers and services firms for their assessment of business conditions in the year ahead, shows that the number of companies expecting output to fall over the year ahead exceeds those predicting an increase – albeit only just – for the first time since compared data were first available in late-2009.
At -1%, the net balance is down sharply from +24% in June and compares with a historical average of +30%.
Moreover, among the 12 countries for which both manufacturing and services data are available, Germany is the only nation with a negative net balance – although eight others have seen confidence wane since mid-year, including the US (+10% from +16%) and France (+23% from +26%).
Broken down by sector, the data indicate that German manufacturers are the most downbeat about future output (-9%) since the start of 2009.
Expectations among service providers are only mildly positive (+3%), which points to the lowest degree of confidence in that sector in ten-and-a-half years. ■