ahk world business outlook

AHK World Business Outlook Fall 2020Results of a survey among theGerman Chambers of Commerce Abroad (AHKs)

1

Business Situation

Business expectations

Economic Expectations

Investment intentions

Employment intentions

Risks

Covid-19 Pandemic

Supply chain changes

Changes of location

Business situation in the countries

Imprint

AHK World Business Outlook Fall 2020The AHK World Business Outlook is based on a survey of member companies of the German Chambers of Commerce Abroad, Delegations and Representative offices (AHKs). More than 3,500 German companies, branches and subsidiaries as well as companies with close ties to Germany participated in the October 2020 survey.

39 percent of the responding companies come from the industry and construction sector, 40 percent from the service sector and another 21 percent are trading companies. Smaller companies with less than 100 employees account for 47 percent of the responses. 24 percent of the companies employ 100 to 1,000 employees. Large companies with more than 1,000 employees worldwide account for 29 percent of respondents.

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Business situation of German companies abroadBalance in points

AHK World Business Outlook Fall 2020

-20

-10

0

10

20

30

40

50

60

202020192018201720162015

The business of German companies abroad is recovering compared to the spring. However, they are still far from reaching pre-crisis levels. 32 percent of the companies assess their situation as good, 22 percent as bad. The resulting balance is 10 points.

4

Business expectations of German companies abroadBalance in points


-40

-30

-20

-10

0

10

20

30

40

50

60

202020192018201720162015

Based on the poor assessment of the situation, companies' business expectations for the next twelve months have already returned to pre-crisis levels. The balance of better and worse ratings is 27 points, but still below the long-term average of 33 points.

5

Economic expectations of German companies abroadBalance in points


-60

-50

-40

-30

-20

-10

0

10

20

30

40

202020192018201720162015

The expectations of German companies abroad regarding the economic situation in their respective countries are better than in the spring, but they differ significantly from region to region. Overall, the global balance is balanced at minus one point. 33 percent expect the economy to improve, 34 percent expect it to deteriorate in the next twelve months. The long-term average before the crisis is 9 points. All in all, this results in a rather weak global economic recovery in 2021.

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Expected economic development in the next 12 months:German companies in China with great confidence


North America32% 41% 27%

World33%

better33%same

34%worse

South and Central America44% 25% 31%

Greater China51% 32% 17%

Asia/Pacific30% 39% 31%

Africa, Near/Middle East33% 35% 32%

Other EU25% 26% 49%

Eurozone27% 32% 41%

Eastern/Southeastern Europe16% 33% 51%

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When do companies expect the economy in your country to recoverAHK World Business Outlook Fall 2020

Continent (in percent) Recovery in the course of 2020

Recovery in the year 2021

Recovery in the year 2022

An economic recovery will take longer

We do not expect a return to normality

Africa, Near and Middle East 4% 39% 30% 21% 6%

South and Central America 2% 34% 40% 22% 2%

Asia/Pacific (excluding China) 2% 40% 41% 16% 1%

China 25% 44% 20% 9% 2%

Eurozone 2% 32% 44% 19% 2%

Other EU, Switzerland, Norway 2% 35% 34% 25% 3%

North America 4% 34% 43% 18% 1%

Rest of Europe incl. Turkey/Russia 1% 30% 45% 20% 3%

WORLD 4% 36% 38% 19% 3%

8

Investment intentions AHK World Business Outlook Fall 2020

2854

261918

47

34

454644

2512

293538

Autumn2020

Spring2020

Autumn2019

Spring2019

Autumn2018

Investment intentions

higherconstantless

Shares in percent

A quarter of German companies abroad want to invest more, 28 percent are planning to reduce their investments in the next twelve months. A year ago, investment intentions were already at a negative record of plus three points on balance, and are currently only at minus three points. Of the companies affected by travel restrictions, only one in five even wants to invest more.

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Employment intentions AHK World Business Outlook Fall 2020

Shares in percent

26 percent of German companies abroad want to hire more staff. In contrast, 21 percent expect to cut jobs in the next twelve months. The employment intentions do not match the expansionary plans in the pre-crisis period.

2135

171313

53

54

535348

2611

303439

Autumn2020

Spring2020

Autumn2019

Spring2019

Autumn2018

Employment intentions

higherconstantless

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


9

12

20

14

14

23

37

19

45

69

9

13

16

18

20

26

27

28

48

63

Infrastructure

Energy and raw material prices

Labour costs

Legal certainty

Lack of skilled workers

Trade Barriers

Financing

Exchange rate

Economic policy framework

Inquiry

Autumn 2020Spring 2020

Demand

Demand, economic policy conditions and the exchange rate are the most frequently mentioned risks for German companies abroad. The financing risk has decreased compared to the spring, but still affects more than a quarter of the companies and thus significantly more than a year ago.

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Risks: Individual factors over timeAHK World Business Outlook Fall 2020

0

10

20

30

40

50

60

70

80

2015 2016 2017 2018 2019 2020

Demand

0

10

20

30

40

50

60

70

80

2015 2016 2017 2018 2019 2020

Trade Barriers

0

10

20

30

40

50

60

70

80

2015 2016 2017 2018 2019 2020

Financing

63%

26% 27%

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Effects of the Covid-19 Pandemic on companies AHK World Business Outlook Fall 2020

4%

16%

12%

31%

29%

43%

47%

33%

59%

63%

3%

17%

18%

22%

31%

38%

49%

51%

53%

75%

Miscellaneous

Missing goods / services

Own production downtime / sickness absence

Liquidity bottlenecks

Problems in the supply chain / logistics

Cancellation of orders

Investments are postponed / cancelled

Cancellation of fairs / events

Less demand

Travel Restrictions

Autumn 2020

Summer 2020

13

36%36%36%36%36%36%

37%39%

41%43%

43%48%

50%54%

56%

PeruIran

ArgentinaThailand

ChinaVietnam

TurkeyIndonesiaMalaysiaRomania

PhilippinesSouth Africa

New ZealandUnited Kingdom

India

AHK World Business Outlook Fall 2020In these countries, the most frequently mentioned problems in the supply chain / logistics are

14

When do the companies expect Return to normality of business? (figures in percent)


4

2

2

25

2

2

4

1

4

39

34

40

44

32

35

34

30

36

30

40

41

20

44

34

43

45

38

21

22

16

9

19

25

18

20

19

6

2

1

2

2

3

1

3

3

Africa, Near and Middle East

South and Central America

Asia/Pacific (without CN)

China

Eurozone

Other EU, Switzerland, Norway

North America

Eastern/Southeastern Europe (without EU, RU, TR)

WORLD

Recovery in the course of 2020 Recovery in 2021 Recovery in 2022 An economic recovery will take longer We do not expect a return to normality

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What measures do companies plan or take due to the effects of the Covid-19 pandemic?


6%

12%

16%

26%

46%

61%

66%

Miscellaneous

Search for new locations

Changes in the supply chain

Reduction of personnel

Investments are postponed / cancelled

Increased digitization in the company

Cost reductions

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16% of companies plan changes in the supply chain. For these reasons ... (multiple answers possible)


66 % Cost optimization

56 % For diversification or risk minimization in case of failures

42 % Trade Barriers / Customs / Local Content Regulations

42 % Travel Restrictions

13 % Sanctions 3 %

Other

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19%20%21%21%

22%23%24%24%

25%26%

28%29%

32%50%

55%

EgyptChina

AlgeriaNigeria

Russian FederationPhilippines

EcuadorNew Zealand

IranVenezuela

IndiaSouth Africa

BoliviaItaly

United Kingdom

AHK World Business Outlook Fall 2020Companies from these countries are planning changes in the supply chain

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12% of companies are looking for new locations. For these reasons... (multiple answers possible)


51 % Marketdevelopment

36 % For diversification or risk minimization in case of failures

46 % Cost optimization

32 % Trade barriers/customs duties/Local content regulations

27 % Economicreasons

27 % Travel restrictions

12 % Sanctions

5 % Other

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14%

14%

17%

17%

18%

18%

20%

21%

23%

24%

24%

24%

30%

55%

BelarusArgentina

TunisiaNigeria

PeruEcuador

ColombiaSingaporeVenezuela

EgyptSouth Africa

BoliviaIran

United Kingdom

AHK World Business Outlook Fall 2020Companies from these countries are looking for new locations

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Business situation - AmericaAHK World Business Outlook Fall 2020

18%

20%

37%

32%

27%

37%

16%

28%

40%

37%

17%

56%

40%

54%

53%

40%

35%

54%

49%

45%

46%

37%

26%

40%

8%

15%

33%

27%

30%

23%

15%

18%

46%

ArgentinaBoliviaBrazilChile

EcuadorColombia

MexicoPeru

UruguayUSA

Venezuela

well satisfactory bad

21

Business situation - Asia/PacificAHK World Business Outlook Fall 2020

43%

24%

19%

6%

25%

22%

25%

52%

19%

18%

17%

23%

36%

47%

59%

59%

48%

35%

47%

52%

29%

45%

58%

48%

51%

41%

10%

18%

22%

45%

40%

31%

23%

20%

36%

25%

35%

26%

23%

ChinaHong Kong

IndiaIndonesia

JapanSouth Korea

MalaysiaNew Zealand

PhilippinesSingapore

TaiwanThailandVietnam


22

Business situation - EuropeAHK World Business Outlook Fall 2020

41%

34%

14%

43%

20%

45%

25%

25%

42%

38%

20%

9%

45%

47%

60%

35%

66%

50%

60%

39%

50%

45%

60%

12%

14%

19%

26%

22%

15%

5%

15%

36%

8%

17%

20%

79%

DenmarkFinlandFranceGreece

ItalyNetherlands

AustriaPortugalSweden

SwitzerlandSpain

United Kingdom


23

Business situation - Central/Eastern EuropeAHK World Business Outlook Fall 2020

35%

44%

39%

34%

35%

45%

63%

19%

23%

55%

49%

57%

49%

52%

42%

33%

59%

68%

10%

7%

4%

16%

13%

13%

4%

22%

9%

Romania

Russia

Serbia

Slovakia

Czech…

Turkey

Ukraine

Hungary

Belarus


24

Business situation - Africa/Middle EastAHK World Business Outlook Fall 2020

39%

17%

29%

43%

27%

18%

20%

28%

43%

40%

40%

37%

54%

50%

56%

40%

18%

43%

31%

20%

20%

32%

24%

31%

Egypt

Algeria

Iran

Nigeria

Saudi Arabia

South Africa

Tunisia

United Arab Emirates


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Contact personKevin HeidenreichMail: [email protected]: @B030

ImprintAssociation of German Chambers of Industry and Commerce e. V. (DIHK)International Economic Policy, Foreign Trade Law

Publisher and Copyright© Association of German Chambers of Industry and Commerce e. V.Postal address: 11052 Berlin | home address: Breite Straße 29 | Berlin-MittePhone 030 20308-0 | Fax 030 20308-1000

DIHK BrusselsRepresentation of the German Chambers of Industry and Commerce to the European Union19 A-D, Avenue des Arts | B-1000 BrusselsPhone : +32 2 286-1611 | Fax +32 2 286-1605

Internet www.dihk.deFacebook www.facebook.com/DIHKBerlinTwitter http://twitter.com/DIHK_News

Editor Kevin HeidenreichGraphic Sebastian Titze

Picture credits https://www.gettyimages.de

November 2020

https://twitter.com/B030

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