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Presentation by Caroll H. NeubauerChairman & CEO, B. Braun
Medical Inc.Chairman, GACC New York
Prepared by Roland Berger
German American Business Outlook 2017
GACCWelterSticky NoteDecember 5, 2016
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German American Business Outlook 2017
Introductory remarks
Immediately following the 2016 US presidential election, the
German American Chambers of Commerce (GACCs – AHK USA), the
Representative of German Industry & Trade (RGIT), and Roland
Berger Strategy Consultants, for the seventh time, conducted a
survey of German subsidiaries in the U.S.: the German American
Business Outlook
1,900 headquarters of German subsidiaries in the US were
approached, senior management from various industries responded,
mainly from the traditional German Mittelstand (88%)
The purpose of the survey was to gauge respondents' opinions on
the current business conditions and future outlook in light of the
newly elected administration
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Structure of results presentation
1 Survey respondent analysis
2 U.S. election and German business in the U.S.
3 State of business
4 Future expectations
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Respondents represented a comprehensive spectrum of regions and
industries, primarily SMEs in Automotive and Manufacturing
1) Based on employee count; 2) Respondents can be present in
more than one industry – results normalized to 100%
By region [%] By company size1) [%] By industry2) [%]
South 49%
Midwest 33%
West coast 5%
Northeast 12% 1-10 23%
>1000 9%
501-1000 2%
151-500 12%
51-150 26%
11-50 27%
6%Professional Services
11%
Industrial Manufacturing 21%
Automotive 24%
9%Other (please specify)
Consumer Goods and Retail
3%
Chemicals, Pharma, and Healthcare
Financial Services 4%
Transportation and Logistics
6%
Construction and Infrastructure
9%
Energy and Natural Resources
7%
Study participant breakdown
1 Survey respondent analysis
Source: German American Business Outlook
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As with most elections, opinion is split on the impact of recent
presidential election in the US
1) Only includes responses submitted after election day; 2)
Numbers may not sum to 100% due to rounding
"Do you expect that the newly elected U.S. Administration’s
economic policies will benefit your U.S. business?"1)
2 U.S. election and German business in the U.S.
Source: German American Business Outlook
Overall [%] By industry2) [%]
Negativeimpact
Noimpact
Positiveimpact
30%28%
42%
50%
47%
46%
32%
29%
24%
22%
20%
15%
37%
43%
41%
43%
43%
45%
40%
38%
32%
29%
35%
35%
43%
43%13%
14%
33%
Financial Services
Professional Services
10%
Automotive
Energy and Natural Resources
Chemicals, Pharma, and Healthcare
Industrial Manufacturing
Consumer Goods and Retail
Construction and Infrastructure
Transportation and Logistics
Positive impact Negative impactNo impact
100%
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Opinion is also split regarding preferred priorities for the new
Administration
Free trade agreements
Ease of visa process & immigration reform
Investment in physical infrastructure
52%
58%
52%
45%
Investment in apprenticeship & training
Incentives for investment
55%
60%Comprehensive tax reform
1) Share of overall votes (multiple responses allowed)
"Which of the following should be prioritized by the new U.S.
Congress / Administration?"1)
Source: German American Business Outlook
Example "Other" responses…
Reduce regulation and bureaucracy
Comprehensive lobbying & campaign
finance reform
Ports
Health care reform
2 U.S. election and German business in the U.S.
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Most companies are more optimistic about their own business
growth outlook than about the U.S. economy as a whole
1) Flat is defined as +0-1%, moderate is defined as +1-3%, while
strong is defined as +>3%; Numbers may not sum to 100% due to
rounding
U.S. growth outlook1) [%]
Own business growth outlook1) [%]
65
90
11
80
9 8
88
4 12
88
0 5
94
1 14
86
1
Strong growthFlat to
moderate growth
Contraction
> Companies have positive outlook for the U.S. economy
> 14% of companies, the largest share in five years, expect
strong growth of the U.S. economy in 2017
Insights
20162013 2015201420122011
27
63
9
4651
4
5940
1
4553
2
5344
2
4355
2
Contraction Flat to
moderate growth
Strong growth
∑ 2016: 98%
Source: German American Business Outlook
2 U.S. election and German business in the U.S.
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Driven by customer demand, the U.S. remains a key strategic
focus for many German American companies
1) Multiple responses allowed
Strategic focus on U.S. since last year [%]
Top reasons for future investment in the U.S.1) [%]
Increased strategic focus
46%63%
Decreased strategic focus
1%5%
No change
53%32%
> Only 1% of companies are decreasing their focus on the
U.S.
> Investment in the U.S. is driven by strong demand for
products (87%) and the opportunity to be closer to customers
(55%)
∑ 2016: 99%
Favorable
energy costs
5%
Exchange rate
conditions
8%
Relative
market stability
25%
Proximity to
customer base
55%
Customer demand for
your goods/services
87%
15%
70%57%
10%
47%
20162015
20162015
Source: German American Business Outlook
Insights
3 State of business
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Sales volume continues to grow for majority of respondents
–Sixth consecutive year of strong growth
Change in sales volumes [%]
72
1214
2
65
1617
1
69
20
9
2
68
22
10
0
72
1513
0
70
1512
2
Worse No change Better/much betterMuch worse
∑ 2016: 85% > 85% of companies report same or better/much
better sales volumes, continuing the economic recovery of past
years
> The share of companies with negative impact on sales
volumes has slightly increased, 2% of companies reported much worse
sales decrease
20122011 2014 20152013 2016
Source: German American Business Outlook
Insights
3 State of business
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Regardless of size, between 80% and 96% of companies plan to
increase their workforce in 2017
0-50 51-500 501+ Insights
> Large companies hired more than expected in 2016, as German
American companies capitalize on the strong US economy
> Small companies are the most optimistic when it comes to
hiring
2%
71%
2017
2%
96%
2%
2016
27%
No change IncreaseReduction
1) Based on employee count
Headcount change by company size [%] 1)
3 State of business
Source: German American Business Outlook
Planned
10%
2017
8%
82%
2016
Actual
2016
2%12%
86%
2017
0%20%
80%
Planned
3%
2017
18%
78%
2016
Actual
59%80%
29%
13%12%
2016 2017
7%
Planned
13%
2017
13%
2016
73%
Actual
? ? ?
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Companies continue to face difficulty attracting skilled labor
–Engineering and manufacturing most difficult
1 2 3
Difficult Easy
Engineering
Manufacturing
Sales
IT
"Do you experience difficulty in attracting skilled labor?"
2016
69% Yes
3 State of business
Source: German American Business Outlook
+10%
2011
59% Yes
Please rate the ease of finding qualified workers in the
following fields:
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Manufacturing expansion continues to be strong, IT & Big
Data investment planned by most companies for 2017
Strategic initiatives
Investment in IT & Big Data
35% of companies plan to invest in IT & big data in 2017 – A
sign that SMEs understand the importance of big data
35%Planned in 2017
Investment in manufacturing was the strongest initiative in 2016
and expected to continue in 2017
Expansion of manu-facturing capabilities28%
Planned in 2017
Expansion through M&A
M&A activity is planned to increase from 2016; 50% more
companies than in 2016 are planning on M&A in 2017
17%Planned in 2017
4 Future expectations
Source: German American Business Outlook
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Companies expect a positive impact if tariffs are reduced
between the U.S. and EU, while Brexit is unlikely to impact
investment
U.S. and EU trade relations Brexit impact
U.S. legal risks
Negative impact
No impact
Positive impact
2016
2%
27%
70%
Reduce hiring & investment
No impact
Expand hiring & investment
2016
2%
37%
61%
"What impact would reducing tariffs and harmonizing standards
between the U.S. and EU have on your U.S. business?"
"If positive, how would this impact your employment and
investment plans in the U.S.?"
Negative impact on US investment
No impact on US investment
Positive impact on US investment
2016
8%
87%
5%
No concern for future investment
Low concern for future investment
Strong concern for future investment
2016
32%
55%
12%
4 Future expectations
Source: German American Business Outlook
If positive impact
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German American companies continue to grow in a more uncertain
business environment
Summary
State of business Sales volume has continued to grow for the
majority of companies. Regardless of size, most companies plan to
increase their workforce in 2017. Companies continue to face
difficulty attracting skilled labor – Engineering and manufacturing
most difficult.
U.S. election and German business in the U.S.
As with most elections, opinion is split on the impact of recent
presidential election in the US – yet only 1% of companies are
decreasing their strategic focus on the US. From the new
administration, companies expect tax reform, investment in
apprenticeships and infrastructure to support further
investment.
Future expectations
Manufacturing expansion was the most prevalent initiative in
2016, IT & Big Data investment planned by most companies for
2017. Most companies are more optimistic about their own business
growth outlook than about the U.S. economy as a whole. Driven by
customer demand, the U.S. remains a key strategic focus for many
German American companies.
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With their 3 main offices in Atlanta, Chicago, and New York and
branch offices in Detroit,
Houston, New York, Philadelphia and San Francisco, the GACCs
(AHK USA) have
approximately 2,500 member s from all industries. The GACCs
offer a broad spectrum of
activities and services for the German-American business
community. Fostering bilateral
trade and investment, and the provision of consulting services
are among the key tasks.
The GACCs, coordinated and supported by the German Association
of Chambers of
Industry and Commerce (DIHK), are an integral part of the
network of German Chambers
of Commerce Abroad with 130 offices in 90 countries around the
globe.
The Representative of German Industry and Trade (RGIT) is the
liaison office of the
Federation of German Industries (BDI) and the Association of
German Chambers of
Industry and Commerce (DIHK) in Washington. RGIT represents the
interests of the
German business community vis-à-vis Congress, the US
administration and the
international organizations based in Washington, D.C. We report
regularly on
economically significant developments as well as legislative
activities in the US and
provide our partners in the United States with information on
German business.
Founded in 1967, Roland Berger is one of the world's leading
strategy consultancies.
With 50 offices in 36 countries, the company has 2,400 employees
contributing to its
successful operations in all major international markets. The
strategy consultancy is an
independent partnership exclusively owned by about 220
Partners.
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German American Chamber of Commerce, Inc. – AHK USA-New York
James Freeman
75 Broad Street, 21st Floor, New York, NY 10004
T +1 (212) 956-1770 | F +1(212) 074-8867
[email protected] I www.gaccny.com
German American Chamber of Commerce of the Midwest, Inc. – AHK
USA-Chicago
Franziska Weyer
321 N Clark Street, Suite 1425, Chicago, IL 60654
T +1 (312) 494-2169 | F +1 (312) 644-0738
[email protected] I www.gaccmidwest.org
German American Chamber of Commerce of the Southern United
States, Inc. – AHK USA-Atlanta
Stefanie Jehlitschka
1170 Howell Mill Rd, Suite 300 Atlanta, GA 30318
T +1 (404) 586-6803 | F +1 (404) 586-6820
[email protected] I www.gaccsouth.com
Representative of German Industry + Trade
Daniel Andrich
1130 Connecticut Ave, NW, Suite 1200, Washington, DC 20036
T +1 (202) 659-6831 | F (202) 659-4779
[email protected] | www.rgit-usa.com
Roland Berger Strategy Consultants LLC
Marc Winterhoff, Partner
37000 Woodward Avenue, Suite 200, Bloomfield Hills, MI 48304
T +1 (248) 729-5000 | F +1 (248) 649-1794
[email protected] | www.rolandberger.com
mailto:[email protected]://www.gaccny.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.rolandberger.com/GACCWelterSticky
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