AHK World Business Outlook – Fall 2023

According to a recent survey by the German Chambers of Commerce Abroad (AHKs), German companies are also feeling the effects of an overall economic slowdown at their international locations. Despite the associated challenges, however, they are currently expanding their global involvement in many markets.

The highlights of this survey results:

Companies predominantly expect an economic slowdown at their international locations. Only 22 percent expect the economy to pick up in the next twelve months, while 28 percent anticipate a worse development.

Against the backdrop of the economic slowdown, uncertainty due to geopolitical risks, and less demand due to persistently high inflation and rising interest rates, companies are reporting a weaker but still stable business situation (45 percent good, 14 percent bad).

Although business expectations are also more cautious than in the spring, they are significantly higher than economic expectations (45 percent better, 12 percent worse). While companies in North America, the Asia-Pacific region (excluding Greater China), and the MENA region, for example, expect business to improve significantly, companies in Europe and China are more cautious.

The economic outlook is clouded by a variety of risks: the top 3 risks include demand (46 percent), economic policy conditions (42 percent), and the shortage of skilled workers (37 percent). Companies' investment intentions are significantly more expansive at their international locations than in Germany (33 percent have higher investment plans, 20 percent lower).

Top reasons for investing in international locations: market size/market development (55 percent), customer proximity/localization (35 percent). Diversification (18 percent), and investment incentives (16 percent) also play an important role for some companies.

All in all, the DIHK expects below-average global economic growth of 2.5 percent for 2024 (average for the last 20 years: plus 3.6 percent). The German economy will only benefit slightly from this - after a decline of 0.5 percent in 2023, German exports will only increase by a meager plus one percent in 2024.

The complete survey results can be downloaded here >>>

The AHK World Business Outlook is based on a regular DIHK survey of member companies of the German Chambers of Commerce Abroad, Delegations, and Representative Offices (AHKs). In fall 2023, it collects feedback from more than 3,600 German companies, branches, and subsidiaries worldwide as well as companies with close ties to Germany. The survey was conducted from 25 September to 20 October 2023.