Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

German DIHK poll shows more pessimism: 'Economy is holding its breath'

Published 02/11/2022, 03:22 AM
Updated 02/11/2022, 03:25 AM
© Reuters. FILE PHOTO: Shoppers wear mask and fill Cologne's main shopping street Hohe Strasse (High Street) in Cologne, Germany, 12, December, 2020.  REUTERS/Wolfgang Rattay

BERLIN (Reuters) - Germany's Chambers of Industry and Commerce (DIHK) on Friday cut its 2022 growth forecast for Europe's biggest economy to 3.0% from the 3.6% it had predicted in October due to rising energy prices, raw material shortages and the lack of skilled workers.

The survey of almost 28,000 firms across all sectors showed that 64% of companies saw rising energy and raw material prices as a business risk, the highest ever recorded in a DIHK survey, compared to 58% in the organization's previous poll.

The balance of companies' positive and negative expectations also dropped to five points from 10, compared to the long-term average of seven points, the data showed.

Only around 10% of companies expect supply bottlenecks to end by mid-2022 and 22% say they do not expect the situation to improve until 2023, DIHK said.

"We will probably not reach the pre-crisis level of our economic output until the middle of the year," DIHK Managing Director Martin Wansleben said, adding expected cost increases due to energy transformation may discourage some investors.

"Germany as a business location has the world's highest energy prices at the moment. The tax burden for companies is also well above the average for all OECD countries," Wansleben said.

© Reuters. FILE PHOTO: Shoppers wear mask and fill Cologne's main shopping street Hohe Strasse (High Street) in Cologne, Germany, 12, December, 2020.  REUTERS/Wolfgang Rattay

Just under a third of companies intend to invest more in 2022, while just under a fifth intend to invest less, DIHK said.

"The economy is holding its breath. It is true there is still a cautiously optimistic sentiment among companies. However, there are major uncertainties and many do not know what the future holds," the director said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.