Friday, 8 July 2016

DIHK survey: Brexit will damage German economy

I’ve just been looking at some interesting results from a survey of over 5,600 German companies conducted by the Association of German Chambers (DIHK) at the end of June 2016. The results are only available in German but here are the main points:

German-British trade

27% of those questioned expect their exports to the UK to decrease during the Brexit negotiations. And long-term, around half expect exports to drop. German companies see the biggest risks to trade with Britain as the increasing number of tariff and non-tariff barriers, political uncertainty and the declining value of the pound.

Based on these results, continued uncertainty and the decreasing value of Sterling, the DIHK have revised their forecasts for export growth to -1.0% for 2016 and -5.0% for 2017 (so a decline). As a comparison, 2014 saw export growth of 11.1% and 2015 12.8%

German companies in the UK

Although the majority of German companies with a presence in the UK see no change in their circumstances and market development, over a third are considering a decrease in investment and about a quarter are looking at reducing headcount. The overwhelming majority (over 90%) predict no such adjustments for their German operations.

British companies in Germany

Interestingly, 21% of British companies in Germany who responded to the survey are looking at increasing their investment in Germany and employing more people. A clear sign of the move to a UK/EU entity configuration within corporate groups to help minimise the volatility of Brexit and ensure future access to the single market.

Wednesday, 29 June 2016

Here's how British companies can secure future access to the single market

British companies can act now to secure access to the single market in both the medium and long-term. By setting up a subsidiary in Germany, you will be able to access the single market from within the EU, benefitting from the free trade area and free movement of goods.

Why Germany?

Germany has always been a popular target for investment from the UK. Over 800 British companies representing a wide range of industries are already present across the country. They enjoy a stable economic, legal and administrative framework in which to do business. Furthermore, Germany is an excellent distribution hub to serve other markets within the EU.

Why act now?

The future trading relationship between the UK and EU is not yet certain. By setting up in Germany now, companies can still take advantage of current favourable commercial and legal frameworks. British companies who plan ahead can minimise their exposure to any possible future volatility and uncertainty by ensuring some operations are conducted from within the EU.

How I can help

Large organisations are already considering splitting their operations into UK and EU entities. SMEs who have up to now sold to EU customers from the UK could also benefit from such an arrangement.
Whether you are looking at setting up a sales / service office or a warehousing and distribution centre, I can provide;
  • initial feasibility studies to help you make the right choice
  • market knowledge on the best places to locate and the incentives available
  • a strong network of legal, financial and accountancy specialists
  • on-the-ground support both in the UK and Germany
Find out more about my services here. Alternatively, for a no-obligation discussion about your future plans, please contact me on 020 3239 5168 or email me now.