Electrical industry: weak demand

The electrical engineering industry is a major sector in manufacturing with a 14% share of turnover and employment. In 2000 it experienced unusual growth with its best results since 1970. In 2001, the industry witnessed a strong decline in demand which was particularly apparent in exports. An improvement of the current situation is not expected until early next year when, with the foreseen recovery of the world economy, the traditionally export-oriented electrical engineering industry will again strengthen. Growth in real production will amount to ca. 4% in 2001 and about 1% in 2002, which is considerably lower than the 12% achieved in 2000. These growth rates provide little hope for an improved profitability in 2001 and 2002, since competition will continue to be strong. However, the price competitiveness of German manufacturers will improve slightly next year despite an upward valuation of the euro, since their unit costs will increase at a lower rate than that of their competitors.