Is the corona pandemic giving the world economy a new face?

More confidence in your own country

km. At the beginning of July, the Association of German Chambers of Industry and Commerce (DIHK) published a survey of 3300 member companies of German Chambers of Commerce Abroad, delegations and representative offices (AHKs) represented worldwide.1 The 16-page report is entitled “AHK World Business Outlook. Special Survey on COVID-19 Effects” and is intended to record the opinion of the companies surveyed on the economic effects of the corona pandemic in the summer of 2020. The respondents are branches and subsidiaries of German companies and companies with close ties to Germany. 48 % of the responding companies come from the industry and construction sector, 34 % from the service and health sector and another 18 % are trading and logistics companies. Smaller companies with less than 100 employees worldwide account for almost 50 % of the respondents. 24 % of the companies have 100 to 1000 employees. Large companies with more than 1.000 employees account for 26 % of respondents.
The survey results show that the economic consequences of the corona pandemic are considered to be very large. The extent of the crisis is perceived as “tremendous”: “59 % see a lower demand for their products and services. 83 % of the companies expect a slump in sales, 15 % even at least a halving of their turnover”. The crisis is also changing business policy: “56 % want to invest less, 43 % want to reduce staff. 38 % of companies are looking for new suppliers.” The respondents assume that the crisis cannot be overcome quickly: “93 % do not expect an economic recovery until 2021 or even beyond.
Production downtimes and delivery difficulties have been recorded in almost all regions of the world. Of the 38 % of German companies abroad that are increasingly looking for new suppliers, more than 60 % do so primarily with local suppliers in the respective country. 37 % of the 38 % mentioned are looking for new suppliers in the European Union and 31 % in their parent country Germany.2
This, according to the study, “primarily affects smaller companies, which in comparison to large companies are looking for new suppliers to an even greater extent and are then also increasingly looking towards Europe”. What consequences are to be expected? “One result of the corona crisis could be that, when searching for suppliers, companies are increasingly looking at default risks in order to obtain their necessary preliminary products and goods even in times of crisis or in the event of a pandemic.” New suppliers are particularly necessary for companies in the retail and construction sectors – around one in two companies is looking for them. The need for new suppliers is also great in industry: 40 % of all industrial companies are planning changes in their supply chain.
21 % of the companies are even thinking of relocating previously outsourced activities back to the European Union, and almost 20 % of the responding companies plan to return to their home country Germany.        •
2 The percentage figures add up to more than 100, because multiple answers were possible.

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