Sectors and Resources
The Sector Research team analyses cyclical and structural developments. On the basis of its findings it draws up business and policy recommendations for the major sectors. These include the important branches of industry as well as wholesale/retail, services, energy, transportation and environmental policy.
Capital stock of many industrial sectors is crumbling in Germany
In the German manufacturing sector real net fixed assets in 2013 were 0.8% lower than in 2000. Looking at the average, however, masks the fact that only four out of 19 manufacturing sectors expanded their capital stock compared with 2000. The major importance of the automotive industry is striking. Its net fixed capital formation exceeded that of all other manufacturing sectors combined between 1995 and 2006 and has done so since 2009. The auto industry boosted its real net fixed asset in Germany between 2000 and 2013 by nearly 38%. In the energy-intensive sectors, by contrast, the capital stock in Germany continues to shrink, a trend that has been ongoing for years. If economic policy conditions in Germany were to deteriorate in future, we would expect manufacturing companies to invest even more heavily abroad. [more]
German industry
German industry benefits from free trade
Free trade stimulates economic activity in all the signatory countries. The free trade agreement between the EU and South Korea is a relatively recent example providing evidence of this fact. In H1 2015, German goods exports to South Korea were up by more than 50% on the level before the agreement came into force in July 2011; by contrast, total German exports increased by merely 13% in the same period. True, German imports from South Korea fell during this period. However, this was due to two sector-specific one-off effects. Stripping out these effects, the imports rose at an above-average pace. The positive economic stimuli should also be a strong argument in support of the current TTIP negotiations. [more]
Carbon bubble
Carbon bubble: Real risk or exaggerated fears?
What is the story with the carbon bubble? How great is the risk of conventional energy company valuations plummeting on account of ambitious climate protection policy? There may be many reasons for investors to channel less money into "fossil fuel companies" than before or to abandon them altogether and opt for other types of investment instead. However, one should not put too much stock in the reason being an ambitious, reliable and internationally comprehensive climate protection policy or a global decline in demand for fossil fuels. A carbon bubble is an unlikely development in such an environment, especially since the evolutionary nature of climate protection policy and technological changes in the energy sector offer the respective companies opportunities to adapt over time. [more]
Car market
China's car market on the road to normality – lasting increase in price pressure
Between 2000 and 2014, unit passenger car sales grew by 27.5% in China on average – per year. However, for the past several months there have been signs of the dynamic growth petering out; from May to July 2015 sales were in fact down 1.3% on the corresponding year-earlier level. The average growth of car demand in China is poised to plummet to a single-digit rate in the next few years. This is a step towards "normality". The anticipated slower growth in demand for passenger cars – coupled with growing production capacities in China for the time being – are likely to lead to further intensifying price and competitive pressures in the Chinese market. German makers of premium-segment cars will be unable to escape completely unscathed from the impact of such a trend. [more]
Car registrations
European Energy Union
European Energy Union coming step by step: New institution due to current challenges
In March 2015, the 28 European Heads of State and Government committed themselves to creating an Energy Union. In principle, the commitment to even stronger cooperation on energy and climate issues is a step forward, even though the decisive impetus came from grave concerns about potential gas supply disruptions as a result of the conflict between Russia and Ukraine. The current discussion also indicates that the Energy Union should initially focus on the further improvement of natural gas supply in Eastern Europe. The further development of infrastructures and markets for grid-based energies are likely to become target areas as well. By contrast, contentious topics such as the nuclear phase-out in Germany and country-specific subsidy programmes for renewable energies are unlikely to be a target area yet. We thus expect an incremental policy of small steps, i.e. by no means a rapid and radical transformation of the European energy sector as a whole.  [more]
German manufacturing sector: Forecast for 2015 output lowered to 1% – only moderate growth also in 2016
The German government is sticking to its target of reducing greenhouse gas emissions by 40% from the 1990 level by 2020. As it currently seems doubtful that the target will be achieved, Minister of Economics Sigmar Gabriel suggests introducing an additional climate contribution for older electricity power plants with particularly high CO2-emissions. Especially older lignite-based power plants would be affected by such a measure. And this at a time when many power plants are under pressure anyway due to changes in the investment strategies of a large Scandinavian investor. [more]
Spotlight on Germany
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