German companies are generally facing a cool economic climate internationally. However, despite the associated challenges, they are currently expanding their global engagement in many markets, as highlighted in the latest AHK World Business Outlook.
The AHK World Business Outlook is based on a regular survey by the German Chamber of Commerce and Industry (DIHK) of the member companies of the German Chambers of Commerce Abroad, Delegations and Representative offices (AHKs). Conducted between 25 September and 20 October 2023, it collected feedback from more than 3,600 German companies, branches and subsidiaries worldwide as well as companies with close ties to Germany.
39% of the responding companies came from the industrial and construction sector, 40% from the service sector and 21% were trading companies. 50% were subsidiaries or branches of German companies, while 38% were local or (non-German) international companies without a branch in Germany and a further 12% were local or (non-German) international companies with a branch in Germany.
“We are currently experiencing a very intense phase with a lot of light and shadow in international business,” said Dr. Volker Treier, Chief Executive of Foreign Trade at DIHK, during the presentation of the AHK World Business Outlook for Fall 2023.
“Unlike in Germany, we see a certain sense of optimism among German companies abroad,” Treier noted. “Companies are also grappling with challenging economic conditions at other locations, albeit with fewer structural challenges than at home. In some locations, they even benefit greatly from favourable investment conditions. However, they also face additional burdens, primarily due to the persistently high interest rates. […] The pronounced demand weakness in China as well as geopolitical risks are negatively affecting the businesses of globally operating German companies.”
In China, companies reported predominantly poor business performance and also had subdued expectations for the coming months, especially due to anticipated weaker consumption. Globally, low demand was mentioned by 46% of respondents as a central business risk.
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