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  • Topic: Economics, Germany, Industry
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Current Issues

German electrical and electronic industry
August 18, 2009

Industry structure allows hopes of early return to growth
Broad portfolio with the focus on capital goods. Close to 80% of the

International topics

German electrical and electronic industry‟s products are capital goods. The industry has an above-average bias towards these products both on international comparison and compared with German industry generally. It relies first and foremost on corporate capital investment and is therefore relatively vulnerable to economic cycles. German electrical and electronic industry plays leading international role. Germany is the leading production location in Europe and the global No. 5.

German electrical and electronic manufacturers supply customers worldwide. The focus of their export activities is on Europe. Asia dominates the global electrical and electronic industry on both the supply and the demand side. The ascendancy of this region was more at the expense of the USA than Europe. Difficult year in 2009 – recovery in 2010. The fall in new orders and

production in the electrical and electronic industry slowed in March for the first time and meanwhile came to a halt. After the steep plunge in the first six months we expect a price-adjusted drop of about 20% in production in 2009. The industry should recover in 2010. The bias towards capital goods should enable an early return to respectable growth – alone because of a statistical level effect and overhang at the turn of the year 2009/2010. The industry should see growth of 6% next year. Long-term growth trend unbroken. In post-unification Germany the electrical

Authors Philipp Ehmer +49 69 910-31879 philipp.ehmer@db.com

and electronic industry has grown at an average annual rate of 3%. Changing demographics have led to a shortage of engineers which limits the industry‟s growth potential. On the other hand, the electrical and electronic industry stands to benefit from the need for modern infrastructure, especially to meet the world‟s energy hunger, and climate change will create demand for energy-efficient products. All in all, these factors suggest that the industry will remain a growth driver and continue to grow at an average annual rate of 3% through 2020. Slump in 2009 – recovery expected in 2010 Real output in the E&E industry, 2005=100 140 +4.9% +9.1% 120 +11.2% +6.3% -19% +6% 110 100 90 80 05 06 07 08 09 10 Sources: ZVEI, DB Research

With the collaboration of ZVEI – German Electrical and Electronic Manufacturers‟ Association Editor Tobias Just Technical Assistant Sabine Berger Deutsche Bank Research Frankfurt am Main Germany Internet:www.dbresearch.com E-mail marketing.dbr@db.com Fax: +49 69 910-31877 Managing Director Norbert Walter

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Current Issues

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August 18, 2009

German electrical and electronic industry

1. Diverse sector with high economic importance
E&E industry is one of the largest industrial sectors
Employees Germany, 2008, „000 Mechanical engineering Electrical & electronic Automotive

The German electrical and electronic industry plays an important part in Germany‟s industrial landscape. On the industry definition used by the German Electrical and Electronic Manufacturers‟ Association (ZVEI) it had nearly 830,000 employees and generated sales of EUR 182 billion in 2008. That is equivalent to 16% and 13% respectively of the German manufacturing industry totals. The electrical and electronic industry is Germany‟s second largest industrial sector in terms of the number of employees and the third largest in terms of sales. However, the figures alone do not reflect the industry‟s importance. The goods it manufactures are used in turn by companies in other sectors for their production. The electrical and electronic industry plays a pivotal role in the economy and is closely intertwined with other sectors. As a result of this interdependence it influences the success of other sectors. Innovations...
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