Some optimism has returned to the German-British business community, but challenges remain
According to the recent Spring Survey of the German-British Chamber of Industry & Commerce, the German-British Business community has become more optimistic in comparison to six months ago, not only in terms of the outlook for their own activities in the UK, but also for the development of the UK economy overall.
As a result of the increase in confidence, more than 40% of respondents will invest more in the medium term and a similar number expect to employ more staff.
The main reason for investing in the UK continues to be the importance of the British market with 70% planning to invest in sales and marketing activities. However, the UK’s appeal as a manufacturing location should not be underestimated, as approximately 15% of respondents plan to increase investment in production and manufacturing activities - a higher share than the manufacturing sector’s overall contribution to the UK economy (10%).
Political uncertainty and the lack of demand (despite the somewhat improving economy) continue to feature most prominently as challenges for our businesses. These are followed by trade barriers, shortage of skills, and regulatory uncertainty. In comparison to our survey results in 2023, energy costs are having a smaller impact on business operations, moving from most (in spring 2023) to third most influential factor (in autumn 2023) and now settling in twelfth position.
With regard to long term geopolitical challenges, political “interference” in supply chain structures, the drive to sustainability and the digital transformation is what keeps companies awake at night. However, overall they feel relatively well prepared to face these challenges.
In terms of the efficacy of the UK government’s policies to address climate change, our respondents’ views suggest that UK policy has not become more effective over the last two years.
Dr Ulrich Hoppe, Director General of the German-British Chamber of Industry & Commerce, commented, "The survey results suggest that a bit more optimism has returned to the German-British business community, but challenges remain.”
64 online interviews were conducted with members of the German-British business community with UK operations. The study was part of the World Business Outlook and conducted in conjunction with the German Chamber of Commerce and Industry (DIHK). Fieldwork was conducted between 4 and 21 April 2024. The full results can be found at: https://grossbritannien.ahk.de/en/german-british-business-outlook
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