German trade associations with a lot of optimistism for 2007

The Cologne-based Institute for the German Economy (IW) has questioned trade associations on the economic situation and their expectations for the year 2007. 32 of the 45 associations surveyed said that the mood in their member companies was better than one year ago. Nine associations reported about an unchanged and only four about a less optimistic assessment of the general economic framework. Thus, most branches expect the economic upswing to continue next year.

Besides a growing foreign demand for German products the IW has also noticed a stronger domestic demand so that the IW´s experts forecast a sustainable upswing while at the same time warning against exaggerated collective wage agreements. The prospects for 2007 in detail:

Production: A clear majority of 31 associations expect output or turnover to be slightly higher than in 2006. The plastics processing and forwarding industries expect business to be even more successful than this. Seven branches of industry forecast financial results to remain unchanged. Just six lines of business, e.g. building industry and retailers, think that there will be a fall in output or turnover.

Investment: 22 associations forecast that members will increase investment in 2007 and another 20 expect investment budgets to remain unchanged. Only in three industrial sectors the development of investment is seen with skepticism.

Employment: Despite the economic upswing the labour market continues to give rise to concern. Even though nine lines of industry believe that employment could probably increase in their respective companies, eleven branches, however, calculate with staff reductions. The majority of 25 branches assume employment to remain unchanged.

Tables with the single results of the federations are callable in the InterNet. GERMAN