AHK World Business Outlook Special survey on the COVID-19 impact Results of a survey of German Chambers of Commerce Abroad, Delegations and Representative offices (AHK)
2 | AHK special survey Corona July 2020
Summary The worldwide effects of the COVID-19 pandemic are an enormous burden on the business of German companies abroad. Travel restrictions, lower demand for products and services as well as decreased investments worldwide are leading to a considerable loss of revenue. As a result, companies reduce their employment and investment plans and search for new suppliers due to a lack of goods. Given the numerous economic and governmental challenges that have to be overcome in many countries, German companies do not expect a rapid recovery.
Revenue development 2020 NO CHANGE
INCRESASE IN REVENUE
8% 5%
DECREASE IN REVENUE
83%
Key results: 1. The extent of the crisis is immense: ▪ 63 percent of German companies abroad are affected by travel restrictions and 59 percent face a lower demand for their products and services. ▪ 83 percent of the companies expect a decrease in revenue, 15 percent at least by half. 2. The crisis is changing business: ▪ 56 percent are planning to invest less, 43 percent are reducing staff. ▪ 38 percent of the companies are searching for new suppliers, mainly in their own country. 3. The crisis lasts longer: ▪ 93 percent do not expect an economic recovery before 2021. ▪ 47 percent complain about a lack of support measures and 52 percent consider the rising government debt as a challenge to overcome the crisis.
The AHK World Business Outlook is based on a DIHK survey of the member companies of the German Chambers of Commerce Abroad, Delegations and Representative offices (AHK). The special survey on the effects of the COVID-19 pandemic in summer 2020 collects feedback from around 3,300 German companies, branches and subsidiaries worldwide, as well as companies with close relations to Germany. 48 percent of the responding companies come from the industry and construction sector, 34 percent from the service and health care sector and 18 percent are trading and logistics companies. Three percent are active in the healthcare industry. Smaller companies with less than 100 employees worldwide account for 49 percent of the responses. 24 percent of the companies employ between 100 and 1,000 people. Large companies with more than 1,000 employees account for 26 percent of those surveyed.
3 | AHK special survey COVID-19 July 2020
What effects of the corona crisis are currently placing a particular burden on companies? 63%
Travel restrictions
69% 59% 57%
Less demand for my products and services 47% 47%
Investments are postponed / cancelled
43%
Cancellation of orders
48% 33%
Cancellation of trade fairs / events
47% 31% 33%
Liquidity bottlenecks / lack of financing
29%
Problems in the supply chain / logistics
45% 16%
Missing goods / services
29% 12%
Own production losses / absence due to sickness Other
22% 4% 3% July 2020
April 2020
Expected change in revenue in 2020 83% decrease in revenue
July 2020
Decrease up to 10%
4%
13%
Decrease by 10-25%
Decrease by 25-50%
Decrease by more than 50 %
29%
26%
15%
8%
No Increase in change revenue
April 2020
No assessment
12%
5%
9%
31%
25%
14%
6% 3%
4 | AHK special survey Corona July 2020
Proportion of companies with expected decrease in revenue in 2020 and expected economic recovery
Eurozone
-83% 48%
North America
43%
-83% 47%
Eastern/Southeastern Europe
-85% 58%
Other EU 50%
35%
China
-80% 50%
-78% 43%
59%
South and Central America Africa, Near and Middle East
-83% 41%
Asia/Pacific (without CN)
-82%
55%
49%
-85% 43%
55%
37%
Revenue in 2020 2020
2021
2022+
Economic recovery
Investment intentions July 2020 10%
34%
April 2020 11%
July 2020 7%
56%
54%
higher
Employment intentions
constant
35%
less
April 2020
50%
11%
higher
43%
54%
constant
35%
less
25%
5 | AHK special survey COVID-19 July 2020
38% of the companies are increasingly searching for new suppliers, thereof in ... Local / in country
63%
European Union
37%
Germany
31%
Asia / Pacific
18%
North America
11%
Rest of Europe incl. Turkey and Russia South America Africa / Middle East
10% 9% 8%
22% of companies are increasingly relocating their sites/production, thereof to ... Local / in country
62%
European Union
21%
Germany
19%
Asia / Pacific
13%
South and Central America North America Africa / Middle East Rest of Europe incl. Turkey and Russia
10% 8% 7% 6%
6 | AHK special survey Corona July 2020
Relocation back to Germany/to the EU 7%
from South and Central America
5% 6%
from Africa, Near and Middle East
5% 3%
from North America
5%
from other EU countries, Switzerland, Norway
4% 4% 4%
from China
3% 1%
from Asia/Pacific (without CN)
2% ... relocation to the EU (excluding Germany)
... relocation to Germany
When do companies expect the local economy to recover? Worldwide
7%
China
50%
15%
43% 59%
25%
Eastern/Southeast Europe (without EU, RU, TR)
7%
58%
Asia/Pacific (without CN)
8%
55%
Eurozone
9%
48%
43%
Africa, Near and Middle East
8%
49%
43%
Other EU, Switzerland, Norway
7%
50%
43%
North America 3% South and Central America 4%
47%
37%
50%
41%
Recovery in the course of 2020
35%
55%
Recovery in 2021
An economic recovery will take longer
7 | AHK special survey COVID-19 July 2020
What challenges do companies see for overcoming the economic crisis locally? Rising government debt burden
52%
Lack of business support measures
47%
Travel restrictions
47%
Political environment
47%
Lack of investment from abroad
43%
Challenges in the health system
33%
Exchange rate Trade barriers / Preference for domestic companies Capital outflow
Imprint Publisher and Copyright Š Association of German Chambers of Industry and Commerce e. V. Postal address: 11052 Berlin | home address: Breite StraĂ&#x;e 29 | Berlin-Mitte Phone 030 20308-0 | Fax 030 20308-1000 www.dihk.de www.facebook.com/DIHKBerlin http://twitter.com/DIHK_News Editorial office Kevin Heidenreich http://twitter.com/B030 July 2020
28% 24% 21%