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Poor mood among suppliers
The business climate for German suppliers deteriorated further at the end of 2023. It fell by 10.6 balance points in December. With a value of -23.8 points, the mood among companies reached its lowest level in over three years. This is the result of a recent economic survey conducted by the German Supplier Industry Working Group (ArGeZ).
The last time the assessment of the current business situation was worse was in September 2020, when only 17 % of German suppliers rated their situation as "good" at the turn of the year. The balance is 5.0 points below the previous month at -17.0 points. At the same time, expectations for the next six months deteriorated by a whopping 11.9 balance points. The signs of a slight easing that were noted in the previous month have thus been reversed. Not even one in ten suppliers surveyed expects business to improve in the first half of 2024. With a balance value of -33.4 points, companies are still more optimistic about the future than they were twelve months ago.
Fundamental concerns
However, according to the ArGeZ, it would be wrong to see this as a positive development. For one thing, the business situation was assessed much better exactly one year ago. On the other hand, concerns about the energy supply characterized the everyday life of many companies at that time. Although the supply situation was still not sustainably secure, fundamental concerns about Germany as a business location now dominated.
The ruling of the Federal Constitutional Court on the Climate and Transformation Fund, which had not yet had a full impact on the November data, is having an ever greater impact. The "budgetary chaos", which contradicts the federal government's plans, has once again fundamentally shaken the uncertainty of companies and citizens. It can be assumed that the general conditions for German suppliers will continue to deteriorate. In the opinion of the ArGeZ, the federal government is "required to address these fundamental issues".
About the ArGeZ
The Working Group of the Supplier Industry (ArGeZ) was founded in 1993 by German industry associations. It has set itself the task of representing the interests of the mostly medium-sized supplier companies in public and vis-à-vis politicians and customer industries. The ArGeZ represents 9,000 companies with around one million employees and is supported by the Federal Association of the German Foundry Industry (BDG), among others.
