Economic Profile: Germany's economic policies enhance a broad and competitive industrial environment with a strong focus on innovative future technologies. Many small and medium sized enterprises utilise this potential, making them leaders in their respective markets. Across industries large and small, German products are world-wide export hits.
According to recent studies, Germany ranks as the top investment location in Europe. Along with its relative economic stability, Germany is the largest domestic market within Europe, creating a large and stable customer base for investors. Germany's integration into the world economy also allows companies to gain and share knowledge, products and employees within a global network.
Europe's Economic Hub
Germany is the largest market in Europe. It constitutes 21 percent of Europe's GDP (EU-28) and is home to 16 percent of the total European Union (EU) population. The German economy is both highly industrialised and diversified - with equal focus placed on services and production.
Strong Economy
After two years of weaker growth, Germany recovered in 2014. The German economy finds itself in a solid upswing. The German government forecasts significant growth of 1.8% in GDP for 2015 and 2016.
Global Player
The German exporting industry presents itself stronger than ever. It is an important pillar of German economy. The decline of international trade in the wake of the financial crisis was soon overcome. Germany is the world's third-largest exporter after China and the United States. The export figures in 2014 were on a similar high level as record setting year of 2013. The demand for export products is still high. Thus, imports in 2014 amounted to 917 billion euros and exports surpassed the 1.1 trillion euro mark.
German-produced goods from the chemical, automotive, and machinery & equipment industries are in particularly high demand world-wide. Germany's main trading partners include European countries such as France, the UK, Italy, and the Netherlands as well as international markets such as the United States, China, Russia, and Japan. Sixty-eight percent of all exports are delivered to European countries, of which of which 58 percent go to member states of the European Union. In 2014, the number two region for German exports was Asia, receiving approximately 17 percent of all goods from Germany, followed by the Americas at roughly twelve percent.
Economic Structure
Key driver: The Manufacturing industry
Almost 10 percent of Europe's manufacturing companies are German. They generate 30 percent of the EU's gross value added in manufacturing alone. In fact, they represent more than one fifth of all of Germany's value added - one of the highest shares in Europe. Increasingly more foreign companies are placing their faith in Germany as an essential location for production sites and are benefiting from the country's excellent business framework and superior productivity rates.
Enomic backbones: Small and medium-sized enterprises
Exports are driven by Germany's backbone of highly innovative small and medium-sized enterprises (SMEs). These constitute 99.6 percent of all companies that employ 62 percent of all employees in Germany. Many of these SMEs are world market leaders in their respective niche segments. Together with internationally leading companies-such as Bayer, BASF, Daimler, Volkswagen, and Siemens to name but a few-they make up Germany's manufacturing industrial base.
Data refers to the industrial economy in industry classification codes WZ 2008 A-N and P-S. Exceptions are marked.
-- Estimation of IfM Bonn. Includes companies with a taxable turnover higher than EUR 17,500 per year or at least one employee that is subject to social insurance contributions. Industry classification codes WZ 2008 B-N and P-S are included. Original data from the Federal Statistical Office Business Register 2010. Identification of SMEs by number of employees and turnover.
-- Estimation of IfM Bonn. Original data from the Federal Statistical Office Turnover Tax Statistics. Identification of SMEs by number of employees and turnover.
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GDP SHARE OF POPULATION SHARE OF
(in EUR tn) TOTAL GDP (in m) TOTAL
(EU-28) POPULATION
(EU-28)
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Germany 2.90 21% 81 16%
UK 2.22 16% 66 13%
France 2.14 15% 64 13%
Spain 1.06 8% 47 9%
Netherlands 0.65 5% 17 3%
Poland 0.41 3% 38 8%
Czech Republic 0.16 1% 11 2%
Hungary 0.10 1% 10 2%
USA 13.11 318
Japan 3.59 127
EU-28 13.92 507
Eurozone 10.08 335
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Note: Data refers to 2014.
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Source: Eurostat (2015), US Census Bureau (2015),
Japanese Statistics Bureau (2015).
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GERMAN ECONOMIC PERFORMANCE
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2014 2015 2016**
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GDP 1.6 1.8 1.8
Private Consumption 1.2 2.0 1.6
Imports 3.4 5.7 5.1
Exports 3.9 4.7 4.5
Capital Investment 3,4 2.2 3.1
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*Price adjusted year-on-year changes (in %).
**Forecast.
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Source: Federal Ministry of Economic Affairs and Energy (2015)
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COMPANY STRUCTURE IN GERMANY
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Total SMEs SME-Share
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Number of Companies (2014)* 3.71 m 3.70 m 99.6%
Turnover of Companies (2012) 6,096 bn 2,149 bn 35.3%
Employed 26.91 m 15.97 m 59.4%%
Net Value-Added (2012)** 56.5%
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Source: Ifm Bonn (2015).
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