The German export sector is expected to generate more than 70 billion euros less revenue abroad, which also forecasts that the global economy could face a troubled winter.

According to the German Chambers of Industry and Commerce (DIHK), German exports will fall next year due to the weakening global economy. Export revenues are expected to be two per cent than this year, Volker Treier, head of foreign trade at the DIHK, told the German public media.

This means that the German export sector may have more than 70 billion euros less revenues abroad next year.

German GDP might fall by three per cent in 2022, DIHK assumes. The federal government and economic experts are more optimistic: they expect a minus of only 0.4 and 0.2 per cent respectively.

The export forecast is based on a survey by the German Chamber of Commerce Abroad (AHK), which interviewed more than 3,100 German companies operating outside the country to assess their situation. Results suggest the world economy is facing a cold winter from the perspective of German companies active on the international market. Among the main reasons cited are the economic consequences of Russia’s war against Ukraine and China’s break-even policy. Almost one in two companies (47 per cent) expect an economic downturn in their area. One in ten companies already report a very poor economic situation.

The situation was slightly gloomier only back in 2020, at the beginning of the coronavirus outbreak, when almost two-thirds of respondents said that they were in serious trouble.

The DIHK survey shows that the outlook is becoming increasingly gloomy in Europe in particular.

„Companies are concerned that the worst is yet to come,”

DIHK CEO Martin Wansleben explained talking about another economic survey of more than 24, 000 companies. Among the main risks mentioned are high energy and raw material prices, but companies are also worried about rising labour costs due to the price-wage spiral, which has been driven by rising inflation.

Meanwhile, a study by the Cologne-based IW Institute gives little encouragement for the future of the German economy, revealing that 125 billion euros of investment remained unrealised in the three crisis years 2020, 2021 and 2022.

The institute in Cologne also estimated the cost of the pandemic and the war in Ukraine. If these two catastrophic events had not affected the economy, 420 billion euros more value would have been created in Germany between 2020 and 2022.

One of the hardest-hit sectors is the construction industry, where war-triggered inflation and rising material costs have made it brutally expensive to build houses and flats. The number of permits issued for new buildings has been falling for months, indicating that neither people nor investment companies have enough money to start new projects. The Federal Statistical Office only has data for September, when the number of permits decreased by 9.1 per cent to 27,449 compared to the same month last year. This was the fifth month of decline in a row. The August figure was down 9.4 per cent, but the number of permits had been consistently below the previous year’s level in the preceding months as well.

Back then, the German construction sector already complained about rising energy prices and construction interest rates, high inflation and the price hikes of building materials. The trend has only intensified since then, so industry participants expect the October and November figures to be even more depressing.

The negative development is another setback for the federal government, which has set the target of building 400,000 new homes a year. The deep crisis of the German construction industry was recently highlighted in a survey by the Munich-based Ifo Institute for Economic Research. Their study also indicated that the Ifo index measuring business expectations for housing construction fell to minus 48.3 per cent. According to the institute, this is the lowest level since the monthly surveys began in 1991.