German DIHK survey shows more pessimism: “Economy holds its breath”

Shoppers wear a mask and fill Cologne’s main shopping street Hohe Strasse (High Street) in Cologne, Germany, December 12, 2020. REUTERS/Wolfgang Rattay

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BERLIN, Feb 11 (Reuters) – The German Chamber of Commerce and Industry (DIHK) on Friday lowered its 2022 growth forecast for Europe’s biggest economy to 3.0% from 3.6% in October due to the rising energy prices, shortages of raw materials and lack of skilled workers.

The survey of nearly 28,000 companies across all sectors showed that 64% of companies viewed rising energy and commodity prices as a business risk, the highest ever recorded in a DIHK survey, versus 58% in the organization’s previous poll.

The balance of positive and negative business expectations also fell 10 points to five points, from the long-term average of seven points, the data showed.

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Only about 10% of companies expect supply bottlenecks to end by mid-2022 and 22% say they don’t expect the situation to improve before 2023, DIHK said.

“We are unlikely to reach our pre-crisis level of economic output until the middle of the year,” DIHK chief executive Martin Wansleben said, adding that expected cost increases due to the energy transformation could discourage some investors.

“Germany, as a business location, currently has the highest energy prices in the world. The corporate tax burden 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 that there is still cautious optimism among businesses. However, there are great uncertainties and many are unsure of what the future holds,” the director said. .

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Reporting by Zuzanna Szymanska Editing by Paul Carrel

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