The German market is the largest in Europe, attracting many of our clients. Germany has an export-driven economy, which places an even emphasis on services and production. The country offers a stable environment for investors, as well as access to the EU's domestic market. It is also world-renowned for its manufacturing in automotives, mechanical and electrical engineering, and chemicals. Our coverage – using our unique Total Analysis model – ensures that our clients make sound, risk-assessed decisions in Germany. We keep them informed of the latest market moves and political developments, supported by our interactive data and forecasting. They also benefit from in-depth analysis of 21 of Germany's most important industries, as part of our 'top-down' and 'bottom-up' perspective. It is our job to make it easier for you, as our client, to reap rewards in Germany.

Germany Country Risk

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Core Views

  • Germany will feel the impact of 'Brexit' via weaker export growth and reduced private sector confidence as European political and economic risks rise, and we have revised down our real GDP growth forecasts for the country. Nonetheless, Germany's domestic demand story will remain robust, with household consumption and residential construction growing strongly in the next few years.

  • Germany will continue to run large current account surpluses, despite a gradual transition towards a more consumption-based growth model.

  • Strong revenue growth, containment of expenditure, and low interest rates will continue to contribute to a lower German general government debt load over time. There is increasing scope to commit more funds to growth-boosting infrastructure investments, but the window for such a policy shift...

Germany Industry Coverage (22)

Germany Agribusiness

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BMI View: The German agricultural system benefits from high levels of competitiveness, strong infrastructure and a very good farming industry knowhow. Grains, dairy and sugar will all stand to benefit this year and beyond. In the livestock sector, pork producers will be under pressure due to strained relations with Russia. Sugar and milk production will expand due to the removal of quotas. Over the short-term, the unexpected decline in milk prices due to the removal of the quota and lower demand from export markets is hurting smaller dairy farmers, a situation that Berlin has vowed to address promptly by offering subsidies and considering a temporary dairy production quota to help stabilis...

Germany Autos

BMI View:

BMI View: Growth in the passenger car segment will remain robust as strong real wage growth and Germany's economic rebalancing towards more private consumption both provide support to car demand.

Key Views
* Industry recovery to remain in fragile stage in 2016 with widespread discounts and dealer self-registrations bolstering sales numbers.
Source: BMI
* Fall-out from Volkswagen (VW) scandal to remain focused on VW brands only and unlikely to cause serious downturn in overall car demand.
* Commercial vehicle sales to lag passenger car demand as weak investment in heavy industries remains weak....

Germany Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Germany Consumer Electronics

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BMI View: We forecast a second successive year of decline in German consumer electronics spending in 2016, but still a significant improvement over market conditions in 2015. US dollar appreciation hit consumer electronics spending through higher local currency prices in Germany in 2015, which exacerbated negative technology trends, but both the euro-USD exchange rate and technology trends are less hostile in 2016 and will contribute to improved performance even with the downside introduced as a result of Brexit. The medium-term outlook is buoyed by our forecast for euro appreciation from 2017, but volume growth potential is limited due to the maturity of the German market where vendors will be reliant on replacement spending.


Germany Defence & Security

BMI View:

BMI View: Germany will increase defence spending over the coming years, in order to move ahead with Bundeswehr reform and expansion plans, amid regional tensions over the Ukraine conflict and migrant crisis, growing threats from terrorism, and in response to NATO military requirements. The government's planned budget increase will be facilitated by steady economic growth, and a healthy fiscal position. In the short- to medium-term, the MoD will focus on strengthening the army's capabilities - substantially growing its stock of land systems. The country's highly developed domestic defence industry will capture the majority of new contracts, although we do note that German authorities are working to strengthen Europe-wide collaboration on defence programmes, and will seek to support cross-border projects through investment and procurement over our...

Germany Food & Drink

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BMI View: Germany's economic reorientation towards greater domestic consumption bodes well for the food and drink industry, which we forecast to sustain moderate growth rates over the next five years. Food and drink sales will continue to be shaped by increasing consumer demand for convenience and rising health consciousness.

Food and Drink Spending
f = BMI forecast. Source: BMI, national statistics

Key Trends & Industry Developments

  • ...

Germany Freight Transport

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Following a year in which  we saw increasing volumes across the whole of Germany's freight transport sector, BMI believes 2015 will see further growth. 

Total trade is projected to pick up with our Country Risk team forecasting a y-o-y increase of 1.35% in 2015, following an estimated growth at the same rate in 2014. 

Road freight is set to continue to dominate the sector and is projected to grow by 2% in 2015. The sector was unable to defy the downturn losing more than 11% of freight volumes over 2009 and 2010 before a strong recovery begun in 2011.

Port of Hamburg tonnage is also expected to grow, having completed, according to our estimates, a full recovery to its pre-downturn levels in 2014. 

Headline Industry Data

  • 2015 Air freight tonnage is expected to grow by 1.5%...

Germany Information Technology

BMI View:

BMI View: Germany's IT market is lucrative due to an affluent consumer base and strong demand from a diversified enterprise base, and we envisage significant opportunities for vendors at the premium end of the market. Enterprise adoption of complex, high-value solutions is expected to increase over the medium term as modernisation is promoted through the 'Industrie 4.0' initiative. The deepening of the enterprise applications and infrastructure markets through cloud computing services is another area where vendors can capitalise on robust demand growth. The overall growth outlook is however subdued due to a weak economic outlook and the saturation of core device and application markets in Germany. We forecast a CAGR of 2.6% for IT spending to a total of EUR58.3bn in 2019, with the hardware segment expected to exhibit the weakest growth...

Germany Infrastructure

BMI View:

BMI View: Despite strengthening external headwinds, Germany's economy demonstrates resilience, driven by robust private consumption trends. This bodes particularly well for the residential construction sector, which will lead to expansion in the construction industry over the next few years. Over the longer term, the industry will benefit from Germany's ongoing transition to a green energy economy as well as considerable investment in the rail sector.

Latest Updates And Structural Trends

  • Despite external headwinds facing the German economy, we maintain...

Germany Insurance

BMI View:

BMI View: Germany has one of the largest insurance markets in the world, with strong rates of penetration and density in the life and non-life sectors. As a mature market, future growth prospects are relatively subdued, with premiums expected to broadly track wider GDP growth throughout our forecast period. The country is home to several major multinational insurers which dominate the market, many of which are pursuing overseas expansion opportunities in light of the limited growth expected in the domestic market. There is also scope for future consolidation amongst the smaller firms as the market is fragmented with a large number of firms claiming a small share of premiums.

Headline Insurance Forecasts (Germany 2012-2019)

Germany Medical Devices

BMI View:

BMI Industry View : Despite an increasingly challenging operating environment, Germany will remain one of the most attractive medical device markets in Western Europe (WE), testament to the underlying strength of the German economy and a commitment to maintain a high quality healthcare service. From January 2016, a hospital reform programme will help address the problem of chronic hospital underinvestment. In the ambulatory sector, support for innovative forms of healthcare delivery will seek to address...

Germany Mining

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BMI View: Germany's coal sector is one of the largest in Europe and is the main driver of mining activity in the country.

Germany Mining Industry Value
2014e 2015e 2016f 2017f 2018f 2019f ...

Germany Oil & Gas

BMI View:

BMI View: Germany will remain the biggest consumer and importer of oil and natural gas in Western Europe for the next 10 years. Demand for gasoline and diesel will fall as improving efficiencies in the transport fleet weaken consumption patterns.

Headline Forecasts (Germany 2013-2019)
2013 2014e 2015f 2016f

Germany Petrochemicals

BMI View:

BMI View: Germany's petrochemicals industry will be hit by the impact of Brexit due to its reliance on export-oriented industries, particularly the automotive sector, as well as its role as a major petrochemicals supplier in Europe. The sector was already seeing a downturn in sales volumes before the UK's vote to leave the EU, suggesting existing weaknesses in the economy are likely to be exacerbated by the uncertainty caused by Brexit. However, we expect that the effects will be short-lived and that a 'new normal' will arise...

Germany Pharmaceuticals & Healthcare

BMI View:

BMI View: Germany's large and expanding pharmaceutical market will continue to generate commercial opportunities for drugmakers over the forecast period. While Germany's ongoing economic rebalancing will continue to support robust domestic consumption indices, including in health sector segments, healthcare spending will also be driven by population growth owing to net migration in the medium term. Meanwhile, German economic resilience after the UK's EU referendum vote bodes well for the country...

Germany Power

BMI View:

BMI View: The outlook for conventional generation capacity in Germany remains bleak as the country pursues its energy transition - with utilities that have exposure to thermal assets likely to continue to be squeezed financially due to an influx of subsidised renewables capacity. A brief uptick in gas-fired generation in 2016 - due to lower European gas prices - is likely to be short-lived and we retain our view that coal will remain the dominant thermal generation fuel over our 10-year forecast period.

Headline Power Forecasts (Germany 2015-2021)
2015e ...

Germany Real Estate

BMI View:

BMI View: Germany has one of the most developed and investor-friendly commercial real estate markets in the EU, with a strong consumer environment supporting retail and industrial sectors through continued household spending. It is expected that demand for all sectors will remain good in 2016, with low levels of new supply resulting in falling vacancy rates.

The commercial real estate market in Germany benefits from a number of the country's strengths. Berlin has a strong tourist economy, which supports the city's retail sector, while trade flows are improving. Frankfurt is a global financial centre with high rents and demand, particularly for premium property. The city hosts the European...

Germany Renewables

BMI View:

BMI View: We maintain our upbeat outlook for the German non-hydropower renewables sector, as the introduction of capacity auctions - while slowing down growth in the short-term - will help reduce cost of new capacity and ensure that new intermittent power generating capacity can be integrated into the power grid without jeopardising the stability of power supply. Over the long term, these cost-reductions and the improved integration of capacity will cement renewables importance in the power mix, particularly as other power sectors stagnate and the backlog of expensive renewables subsidies is phased out.

Renewables Headline Forecasts (Germany 2015-2021)
2015e ...

Germany Retail

BMI View:

BMI View: A favourable macroeconomic environment, characterised by robust economic growth, rising consumer confidence levels, improving labour market situation as well as attractive crediting conditions, bodes well for the country's large and well-developed retail sector. We believe that the brightening economic outlook will support sustained spending growth in the retail sector, which we expect to accelerate both in 2016 and 2017. That said, we note that the downturn in the broader economic environment, following the Brexit referendum in late June 2016, could have a negative effect on the country's performance and its retail sector.

Headline Household Spending
Household Spending, 2013-2020 (USDbn and % change y-o-y)

Germany Telecommunications

BMI View:

BMI View : We have positively revised our outlook for the German mobile market in Q1 2016. The German mobile market remained positive in the first three quarters of 2015 without posting negative subscriber losses. We believe that the market will be split into three main operators after O2 purchased E-Plus to become the dominant provider. Following consolidation, we believe the market will further split between the main three operators. These will look at convergence and advanced services (LTE, fibre, etc) and the remaining no-frills segment, led by MVNOs and resellers, to drive revenue growth. The strength of the latter will continue to have a negative impact on ARPU, with one of the lowest figures in Western Europe. The saturated market makes convergence and bundling core strategies to survive, and to invest into advanced services, and we would expect consolidation to occur in...

Germany Tourism

BMI View:

BMI View: Germany has long been established as one of the most popular holiday destinations in Europe, attracting millions of visitors annually, from the region and beyond. Supporting infrastructure is very well developed, with a mature and diverse hotel and accommodation sector and extensive and modern road, rail and air travel connections. The government is highly supportive of the tourism industry and invests in the promotion of Germany as a tourism destination in a range of global source markets. This will help to boost tourism arrivals further, though we do note some risks to our currently positive forecasts stem from the country's growing political divide and regional security concerns.

Key Forecasts (Germany 2013-2020)

Germany Water

BMI View:

BMI View: Germany's water industry is highly developed, evidenced through high drinking water and sewage network connection rates, significant investment and strict drinking water criteria. However, in order to become a water powerhouse, Germany must further improve its overall water quality. We see the improvement of water quality as the final hurdle in the advancement of the German water sector.

Over 2014, the German construction industry has indeed shown signs that it is in the best shape it has been for over a year. Yet, in spite of this positivity, we expect the water...

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