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 investment
German industry: Upbeat end to 2014, improved outlook for 2015
Manufacturing output in Germany rose by 1.9% in real terms in 2014. Q4 helped to end the year on an upbeat note, as a decline in output at the end of 2014 – which we had still been forecasting in autumn – did not materialise. The outlook for 2015 has also improved. German industry is getting a boost from the depreciation of the euro, which is materialising faster and more heavily than expected, as well as from the surprisingly steep drop in the oil price. We have therefore recently raised our forecast for manufacturing output in 2015 in real terms ¾% to 1.5%. [more]
Capital investment
Capital investment in Germany at sectoral level: Service providers continue to expand while industry contracts slightly
Germany's service sectors have shown themselves to be keener to invest than industry in recent years. The net fixed assets held by the service sectors grew by almost 28% in real terms between 1995 and 2012, although their growth rate has slowed over time. By contrast, the capital stock in the industrial sectors has shrunk by 1.6% in real terms. While, on the one hand, politicians in Germany have been expressing regret or even voicing criticism over the country's current lack of capital spending, on the other they have recently introduced measures (such as their policies on pensions and labour markets) that are hampering investment in Germany rather than stimulating it; this approach is inconsistent. [more]
Emissions
CO2 emissions from cars: Regulation via EU Emissions Trading System better than stricter CO2 limits
The integration of road transport into the EU Emissions Trading System (EU ETS) using an upstream approach (with refineries and fuel importers as participants) is superior to the instrument of CO2 limit values for cars on the counts of ecological effectiveness and macroeconomic efficiency. This applies in particular if a cap on CO2 emissions enjoys top political priority. Higher taxes on fuel would also be more appropriate than a further tightening of limit values after 2020/21. Nonetheless, if policymakers should decide that (stricter) CO2 limit values for cars are to remain the instrument of choice after 2021, it would be appropriate to gear them to the (lower) targets in other large auto markets. [more]
Climate change
US and China reach climate protection agreement: A bird in the hand is worth two in the bush
At the APEC Summit the US and China reached an accord on long-term targets to combat climate change. The US plans to cut its CO2emissions by 2025 by 26-28% compared with 2005 levels. In China CO2emissions are to peak by 2030 at the latest. Although many reservations will probably be expressed that this is too little to contain the negative consequences of climate change to a manageable degree, given the realities in international climate policy such a compromise is the bird in the hand that may be preferable to the two in the bush. [more]
Commodity prices
Technology
New growth opportunities for Germany's engineering sector: Technology leadership and outward investment
German engineering firms must prepare to confront several trends over the medium term. The first of these is that a new, bipolar world of engineering markets is emerging. The United States and (once again) China are set to become especially promising centres of growth going forward. Further future trends are, secondly, the gradual shift in product focus towards customised system solutions; thirdly, the growing importance of not purely price-related competitive factors; and fourthly, the reconfiguration of the global division of labour in the engineering sector as the classic distinction between producer countries focusing on standard machinery and others focusing on speciality equipment becomes increasingly untenable. Provided that traditional suppliers to the manufacturing sector manage to spot the new mega-trends in good time, they will be able to build on these to develop promising strategies that enable them to adapt, survive and – ultimately – grow. [more]
Spotlight on Germany
 
 
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