Economic Forecast of ZVEI In 2019 the 200 Billion Mark Will Be Broken.

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The German electrical and electronic industry is losing momentum, but is still slightly on the upswing in 2019, ZVEI predicts.

The German electrical and electronic industry expects an economic downturn in the coming months, but is currently doing better than it has for a long time. 2019 is expected to break through the 200 billion euro sales barrier for the first time, ZVEI predicts.

The electrical and electronic industry comprises around 890,000 employees in Germany. According to ZVEI, this is the highest level in 22 years. The industry association is also optimistic for 2019.€ »In the industry, we expect price-adjusted production to grow by one percent and revenues to break the 200 billion euro barrier«, said Dr. Klaus Mittelbach, Chairman of the ZVEI Management Board, at the annual press conference.

In the past year, price-adjusted production in the electrical and electronics industry from January to November 2018 rose by 2,8 percent year-on-year. Sales, which also include services and software, increased in the same period by 3,2 percent to 179.8 billion euros. For the entire year it amounts to 197 billion euros, according to the preliminary figures of ZVEI.

Incoming Orders and Production Decline

In November, order intake was 2.8 percent down on the previous year. The domestic market even increased (1.4 percent), but orders from the euro zone declined significantly (-8.9 percent). Overall, orders from abroad were 5.9 percent lower than in the prior-year period. Factory operators are adjusting their production plans accordingly. In December, they were revised downwards – on balance – for the fourth month in a row.

According to ZVEI, the business climate is also clouded: 15 percent of the companies surveyed are optimistic and 26 percent are pessimistic about the coming six months. Most companies rate their current economic situation as solid: 47 percent see it as good, 45 percent as stable, and 8 percent as bad.

Key to the Future: Digital Business Models and China

If manufacturing companies do not want to lose their favorable market position, there is no way around data-based business models. Currently, the electrical industry generates around 20 percent of its sales with Smart Products and Smart Services. Dr. Mittelbach finds that too little: "Many companies still have plenty of room for improvement. In order to put them in a position where they can also exploit their potential, Mittelbach is calling for the rapid implementation of local 5G networks for industry.

The Chinese market must continue to open up in the future. In the period from January to November 2018, exports rose by 11.4 percent to a total of Euro 19.4 billion. This makes China the largest export partner for the German electronics industry, ahead of the USA (16.4 billion euros). Dr. Mittelbach sees opportunities for more intensive cooperation in the areas of digitization and artificial intelligence.