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FERI Economics Update: November 2019 - Germany: Poor Marks for Competitiveness

Bad Homburg, 11/11/2019
from FERI, Axel D. Angermann
  • World Economics Forum significantly downgrades Germany
  • Major deficits in information and communication technology
  • Declarations of intent must be followed by action and quick results

Bad news for Germany from the World Economics Forum: In the annual ranking of the competitiveness of 141 countries, the business location has slipped four places in one year from third to seventh place and now ranges behind Hong Kong, the Netherlands, Switzerland and Japan. Is there a threat of a relapse into the time around the turn of the millennium, when Germany was labelled the "sick man of Europe"? Weak growth, high unemployment and growing pessimism characterised the picture at the time. The situation today is not the same, but parallels are unmistakable. First, Germany's economy is suffering more than that of other European countries from the global economic slowdown because of the great dependence of its industry on exports: For five quarters, economic output in Germany has been developing more weakly than in the euro zone, and recently it has even declined. At the same time, structural deficits are becoming increasingly apparent. In addition to the structural crisis in the German automotive industry, which will not simply disappear even in the event of an economic recovery, these include above all weaknesses in the dissemination and use of information and communications technology. In this area not only the majority of European countries, but also China and even Russia are ahead of Germany.

It is High Time to Take Action

The rapid succession of Digital Summits in the recent past shows that politicians and the public are now aware of this challenge, which can be seen as progress. The problems are well known and have been described many times: On the one hand, there is a lack of infrastructure - the keywords here are mobile broadband connections and fiber optic networks for internet access. But there is also a lack of a sufficiently optimistic attitude towards modern technologies. If the population were to take advantage of the enormous benefits of electronic payment via mobile phone, for example, retail and gastronomy would no longer be able to hide their own inactivity in this area behind the alleged lack of demand.

It would now be desirable that concrete actions and visible results follow the declarations of intent of the various summits. Given the speed of technological change and the resulting global competition, this should happen quickly. The probable alternative would be that besides no more positive macroeconomic impulses from the previous showcase automotive industry, the country would also be permanently left behind in important future technologies. Then Germany would actually be the "sick man" of Europe again.


About FERI

Founded in 1987 and headquartered in Bad Homburg, Germany, the FERI Group has developed into one of the leading investment houses in the German-speaking area. FERI offers tailor-made solutions for institutional investors, family assets and trusts in the following areas:

•    Investment Research: macroeconomic forecasts and asset allocation analyses
•    Investment Management: institutional asset management and private wealth management
•    Investment Consulting: advisory services for institutional investors and family offices

The FERI Cognitive Finance Institute was formed in 2016. It is the strategic research centre and creative think tank of the FERI Group. The Institute focuses on innovative analyses and the development of methods for long-term oriented economic and capital market research. 

FERI and MLP currently have assets of EUR 37 billion under management. A total of EUR 8 billion of these assets are alternative investments. The FERI Group is headquartered in Bad Homburg and has offices in Dusseldorf, Hamburg, Luxembourg, Munich, Vienna and Zurich.


About Axel D. Angermann

As Chief Economist of the FERI Group, Axel D. Angermann analyses the economic and structural developments of all markets that are important for asset allocation. This data forms the basis for the strategic orientation of FERI's asset investments.

Angermann has been responsible for the analyses and forecasts prepared by FERI for the overall economy and individual sectors since 2008. He joined the company in 2002 as an industry analyst. His professional career began at the Max Planck Institute for Economics and the German Chemical Industry Association. Angermann studied economics in Berlin and Bayreuth.



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Katja Liese

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Corporate Strategy, Marketing and Communications

T +49 (0) 6172 916-3192

F +49 (0) 6172 916-1192

presse@feri.de

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Rathausplatz 8-10

D-61348 Bad Homburg

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Member of the Management Board
Corporate Strategy, Marketing and Communications

T +49 (0) 6172 916-3192
F +49 (0) 6172 916-1192
presse@feri.de

FERI AG
Rathausplatz 8-10
D-61348 Bad Homburg

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Katja Liese
Member of the Management Board
Corporate Strategy, Marketing and Communications

T +49 (0) 6172 916-3192
F +49 (0) 6172 916-1192
presse@feri.de

FERI AG
Rathausplatz 8-10
D-61348 Bad Homburg

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