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MADE IN GERMANY
We highlight selected economic forecasts and industrial trends in Germany for sheet-metal manufacturers .
“ Germany ’ s exporting machinery and equipment manufacturers have held up well in a difficult global environment .”
In November 2022 , the OECD projected that the German economy would grow by 1.8 % in 2022 , contract by 0.3 % in 2023 and recover by 1.5 % in 2024 .
“ Uncertainty is high amidst strong energy price volatility . High inflation is reducing real incomes and savings , damping private consumption . Despite weakening external demand , export growth will recover through 2023 due to easing supply chain bottlenecks and a record high order backlog . If energy-saving requirements are not met during the winter , gas rationing would imply severe production disruptions ,” it commented .
“ The fiscal deficit will widen in 2023 , before contracting in 2024 . It is crucial that energy support measures establish strong incentives for gas savings and target vulnerable households . Corporate support measures should address liquidity concerns and not impede necessary structural change . Improving planning and approval processes and capacity , particularly at the municipal level , would accelerate the energy transition and digitalisation . Skilled labour shortages should be addressed by raising the labour supply of women , elderly and low-skilled workers ; improving training and adult learning ; and facilitating the recognition of the qualifications of migrants and refugees ,” added the OECD .
To reach its ambitious climate targets , added the OECD , the German government plans to invest around 200 billion euros until 2026 , with fiscal incentives to crowd in private investments playing a major role . It also envisions a significant increase in military spending of 100 billion euros over the next few years to upgrade military equipment .
The energy crisis
Before Russia ’ s war of aggression against Ukraine , Germany was highly dependent on Russian gas , oil and coal , with around one-third of primary energy supply coming from Russia . A rapid diversification of energy suppliers , the EU coal embargo and the shutdown of Russian gas pipelines strongly reduced Russian energy imports .
“ The war in Ukraine has created new headwinds including a curtailment of gas flows from Russia ; higher energy prices ; scarcity of key intermediate inputs ; weaker external demand and confidence ; and tighter financial conditions . Growth [ in Germany ] is expected at 1.2 percent in 2022 and 0.8 per cent in 2023 , down from 2.9 per cent in 2021 .
Despite weakening external demand , export growth will recover through 2023 due to easing supply chain bottlenecks and a record high order backlog