6 March 2001, 13:25 GERMANY VDMA LEAVES 2001 PRODUCTION FORECAST UNCH. AT +5% Y/Y
-Expects Domestic Demand To Remain Robust In Europe
-U.S. Slowdown, Dlr Decline Of 10-15% Vs Euro Will Not Impact German
Exports
BERLIN (MtkNews) - The German machinery manufacturing association
(VDMA) Tuesday left unchanged its forecast for production this year at
+5%, noting that economic growth prospects in Europe remain robust due
to the healthy outlook for exports.
"We already forecast last autumn that growth would increase by 5%
this year. We are sticking with our forecast," VDMA President Eberhard
Reuther said at the organization's annual press conference.
"Western Europe, our domestic market, will develop favorably in
2001, since domestic forces will remain robust," Reuther said.
The slowdown in U.S. economic growth this year will not effect
machinery exports from Germany, as the dollar will weaken only slightly
against the euro in the period ahead, Reuther said.
"We don't believe that the foreign exchange rate of the U.S. dollar
against the euro will change noticeably. We just expect a change of
10-15%," Reuther said.
In addition, the VDMA said, the U.S. slowdown would be only
temporary and thus have only a limited effect on German capital goods
exports.
With regard to the Japanese yen, the VDMA said that it expects
the Asian currency to weaken further in the period ahead and that this
would sharpen competition for the German machinery sector.
The 2000 real production increase of 7.3% y/y in the machinery
sector, was the best since German reunification, Reuther said, and
forecast that 2001 export levels will be unchanged from last year year's
strong increase in manufacturing orders for capital goods.
In addition, German firms benefitted from the euro's weakness and
also from moderate wage rounds from 2000.
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