German DIHK poll shows more pessimism: ‘Economy is holding its breath’
February 11, 2022
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.
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.
(Reporting by Zuzanna Szymanska; Editing by Paul Carrel)