German business expects production decline in 2023
2023.01.09 02:37
German business expects production decline in 2023
Budrigannews.com – According to a survey conducted on Monday by the German Economic Institute (IW), four out of ten German businesses anticipate a decline in business in 2023. They attribute this to issues with their supply chains, high energy costs, and the ongoing war in Ukraine.
“The risk of a gas shortage during the winter of 2022/23 is no longer as high as it was in the summer of 2022, and energy prices have also fallen since then.” However, they remain high, and production disruptions cannot be ruled out,” the IW stated in the Reuters-viewed survey.
In addition, “it will only become clear in the course of 2023 how extensive the gas and energy supply that can be built up for the next winter and the extent of any possible disruptions that could occur in 2023” will be.
A third of the 2,500 businesses surveyed anticipate output stagnation, while the remaining quarter anticipate business expansion.
The International Monetary Fund predicts that Germany’s economy, Europe’s largest, will shrink by 0.3% next year, the highest rate among the G7 nations, as a result of a sudden halt in gas deliveries from Russia, the country’s former primary supplier.
In the German construction industry, where more than half of companies surveyed by IW anticipate a decline in production and only 15% anticipate an increase in business, the outlook is particularly gloomy.
The situation is only marginally better in the industry, where 39% of the companies that were surveyed anticipate a decrease due to a cautious assessment in the consumer and basic industries.
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