Annual Report 2017

Future parameters

Global growth is forecast to reach 3.9 percent in 2018 and 2019. The International Monetary Fund (IMF) voiced these expectations in its updated economic outlook at the end of January 2018. Against the backdrop of the US tax reform passed in December 2017 and a stronger recovery in Europe and Asia, the IMF again upgraded its forecasts for global economic growth.

The key risks to the expected economic growth include protectionist tendencies and the correction on financial markets. In addition, the dangers of political uncertainty, cybercrime and terrorism are assessed as similarly high.

For the eurozone, the IMF anticipates economic growth of at least 2.0 percent annually for the next two years. Germany is actually slightly above this figure at 2.3 percent for 2018. For the US economy, the OECD expects a further acceleration in growth to 2.7 percent in 2018. China is even forecast to reach 6.6 percent in the current year and 6.4 percent in 2019.

Growth Forecast of Gross Domestic Product in percent

  2018 2019
World 3.9 3.9
USA 2.7 2.5
Eurozone 2.2 2.0
Germany 2.3 2.0
China 6.6 6.4
Emerging countries 4.9 5.0
Gauged by the Ifo business confidence index, the German economy started the new year with verve. Current survey results reveal an optimistic outlook for Germany in 2018. The German economy is again expected to achieve vigorous economic growth.

However the pressure on prices also picked up at the start of 2018. This is attributable in part to the recent appreciation in the euro, which is eroding the price competitiveness of German exporters. In addition, bottlenecks in areas such as human resources, capacity and supplies are increasingly impeding production operations.

The economy in the eurozone enters the new year with a strong tailwind. The mood among businesses improved again at the start of the year and is at its most positive for almost 12 years. Stronger domestic demand and robust export trade cement this growth trend.

The forecasts published are good news for mechanical engineering companies, because the continuing dynamism of industrial output in international markets is bolstering world trade and investment activity. High demand from abroad is providing a business boost for German mechanical engineering companies. The industry is able to look to 2018 with optimism. As the German Engineering Federation (VDMA) established, the mood in the industry that is the German economy’s biggest source of employment is better than at the start of the previous year. For the new year, the federation again forecasts real growth in output of 3 percent. The mechanical engineering sector even closed its order books for 2017 as a whole with business up 8 percent. The backlog of demand for technology and the digitalisation of production processes are providing impetus.