Michael Stahl Head of Economic Department

Berlin 09-10-02 Dr. Michael Stahl

Michael StahlHead of Economic Department

GESAMTMETALLthe employers’ association of the German

metal and electrical industry

The current economic Situation of the Germanmetal and electrical industry

Berlin 09-10-02 Dr. Michael Stahl 2

Branches of the M+E Industry

• Automotive industry • Mechanical engineering • Electrical engineering • Fabricated metal goods industry • Foundries • Communication equipment• Medical, precision and optical

instruments • Steel working, steel rolling • Non-ferrous metalworking industries • Steel and light metal construction• Shipbuilding and marine engineering• Drawing and cold rolling mills• Aerospace equipment, manufacturing

and repair


60

80

100

120

140

Total

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

July

Incoming orders (by origin)

Upwards againIndex value 2005 = 100, quarterly figures, seasonally adjusted and adjusted for price

July 2009 compared to July 2008

Abroad: -27,8 % Domestic: -13,9 % Total: -21,5 %

Domestic

Abroad

Source: Federal Statistical Office.


60

80

100

120

140

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bottom of the crisis

July 2009 compared to July 2008Fabricated Metal Goods: - 28,5% Electrical Engineering: - 16,6% Mechanical Engineering: - 40,7% Automotive Industry: - 8,1%

1.Q.

July/June 2009 compared to April/May 2009 seasonally adjusted

Fabricated Metal Goods: +2,4% Electrical Engineering: +5,2% Mechanical Engineering: +9,2% Automotive Industry: +11,3% April/May

June/July

Incoming orders by branches

Mechanical Engineering

Fabricated Metal Goods

Electrical Engineering

Automotive Industry

Index value 2005 = 100,quarterly figures, seasonally adjusted and adjusted for price



70

80

90

100

110

120

130

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Still on the bottom

July

July 2009 compared to July 2008 -25.7 percent

Production

Quarterly figures, seasonally adjustedIndex value 2005 = 100



Production by branches

70

80

90

100

110

120

130

140

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fall stopped

Fabricated Metal Goods: -33,5% Electrical Engineering: -24,8% Mechanical Engineering: -31,5% Automotive Industry: -21,5%

July 2009 compared to July 2008

1.Vj.

June/July

April/May


Mechanical Engineering

Fabricated Metal Goods

Electrical Engineering

AutomotiveIndustry

Quarterly figures, seasonally adjustedIndex value 2005 = 100


65

70

75

80

85

90

95

100

Jan. 76,2

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

July 69,3

Normal use of capacity

Source: ifo Business Survey.

Average degree of capacity utilisation in percent of their full use of capacity

As low as never before

Capacity Utilisation


3350

3400

3450

3500

3550

3600

3650

3700

July

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

3.474

Increase in Employment from April 2006 to September 2008:

+242.000

Reduction

July 2009 compared to July 2008 -4.4 percent

Reduction since October 2008:-154.000

Employment

Seasonally adjustedMeasured in thousands of employees

Sources: Federal Statistical Office, Gesamtmetall Calculations; *2009 prelimenary figures.


0

100

200

300

400

500

600

2005

The gap opened again

2006

vacant positions* (reported and not reported)

2007

August

2008 2009

Seasonally adjustedMeasured in thousands of people

Unemployed People

*) according to FAL researches every second vacant position isn‘t reported to FEA

Sources: Federal Employment Agency (FEA), Gesamtmetall calculations.

Labour Market of M+E Occupations


Job security

60

70

80

90

100

110

120

Incoming Orders

Employees

2. Q. July Aug. Sep. Oct. Nov. Dec. Jan. Feb. March Apr. May June

Expected employment at a normal level of productivity

Companies stick to permanent staff

Production

seasonally adjusted

Index value 2. Quarter 2008 = 100

Sources: Federal Statistical Office, Gesamtmetall Calculations.


Short-time work in the M+E Industry

0

200

400

600

800

1000

Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mrz Apr May Jun Jul Aug

Sources: Federal Statistical Office

thousand

2008 2009

480.224

121.200

71.200

363.873

225.263

288.200

648.700

726.200

142.799

82.045

73.539

967.200

974.500896.400

40.721

Short-time work is exploding – Wave of announcements ebbs away

Number of people covered by announcements

Number of Short-time worker


Full time work

netpay

SC

100 % Short-time work

netpay

SC

100 % Short-time work +

further training

netpay

SC

SC = Contributions to Social Security Insurance

Employer Employee

0 € 0 €

What does the employer have to pay?

only up to 7th month


Example: 50 % Short-time work

Short-time work with 50 % reduction of working time

netpay

Employer Federal Employment Agency

netpay

cancellednet pay

STWA67 %Employees

pay

STWA = Short-time working allowance

ES*

Employer subsidy by CA(*not in all regions)


-3,7 -2,6 -1,5

28,2 29,5

-6,5

0,0

-17,6

5,73,8 3,1

-16,1

1,4

11,2

1. half-year

2. half-year

1. half-year

3.Q 4.Q 1.Q 2.Q 3.Q

2007 2008 2009


Job security

Declining productivity – rising costs

Production per hour

Unit labour cost

Annual percentage change


-70

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

Sep.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bottom of the crisis

May

Business Situation


The balance values of the current business situation are the differences of the percentages of the responses “good” and “poor”

Assessment of the present state of business

Balance values, seasonally adjusted


-70

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

Sep.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Positive again

Business Expectations

The balance values of the expectations are the differences of the percentages of the responses “more favourable” and “more unfavourable”

Business outlook for the coming half-year

Balance values, seasonally adjusted



-60

-50

-40

-30

-20

-10

0

10

20

30

Obviously less Sceptical

Jan. Feb. Mrz. Apr. Mai Jun. Jul. Aug. Sep. Okt. Nov. Dez. Jan. Feb. Mrz. Apr. Mai Jun.

Expected Development of Exports for the next 3 Months

2008 2009


Source: ifo Business Survey

The balance values of the expectations are the differences of the percentages of the responses “expected to rise” and “expected to decline”

Expected Development of Production for the next 3 Months

Balance values


-50

-40

-30

-20

-10

0

10

20Further Layoffs in Sight

Jan. Feb. Mrz. Apr. Mai Jun. Jul. Aug. Sep. Okt. Nov. Dez. Jan. Feb. Mrz. Apr. Mai Jun.

2008 2009

Balance values

The balance values of the expectations are the differences of the percentages of the responses “expected to rise” and “expected to decline”

Expected Development of Employment for the next 3 Months

Source: ifo Business Survey



Consumer Prices

3,1

1,6

0,8

0,3

-0,2

0,6

1,0 1,1 1,2 1,2

-1,0

0,0

1,0

2,0

3,0

4,0

III IV I II III IV I II III IV

Close to Stability

annual percentage change

Sources: Federal Statistical Office, Consensus Forecasts, September 2009

quarterly figures

2008 2009

forecasts

July -0,5 Aug. 0,0

2010


Forecasts 2010

2008 2009 2010

GDP 1,3 -4 1/2 1 1/2

productivity 0,0 -2 1/2 3

consumer spending 0,4 1/2 -1/2

public spending 2,1 2 1/2 2

investment 3,3 -22 1/2

export 2,9 -15 5

import 4,3 9 1/2 3

consumer prices 2,6 0 1

Out of the Crises?annual percentage changes

source: IW Köln, 21.9.2009

Documents

Michael Stahl Head of Economic Department