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Annual Report of Messer SE & Co. KGaA 2022

Annual Report of Yeti GermanCo 1 GmbH 2022

Corporate Responsibility Report 2022

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Annual Report of Messer SE & Co. KGaA 2021

Annual Report of Yeti GermanCo 1 GmbH 2021

Corporate Responsibility Report 2021

Since March 2020, the global economy has faced a completely unexpected challenge. In December 2019, a previously unknown lung disease appeared in the central Chinese megacity of Wuhan. Within weeks, the novel corona virus Sars-CoV-2 spread across continents. In January 2020, first Thailand, then the USA, France and finally the Bavarian district of Starnberg (January 27, 2020) reported the first infected persons. Three days later, the World Health Organization (WHO) spoke of a "health emergency of international concern." In almost all economic areas, governments severely restricted public life, numerous companies had to cut back production, global supply chains were disrupted, and private consumption declined. The consequences for the global economy were succinctly summed up by the German Institute for Economic Research in Berlin in its weekly report of September 20, 2020: "In the first half of 2020, the Corona pandemic led to a global recession of historic proportions." After global GDP had already fallen by 4 percent in the first quarter, a further 5 percent crash followed in the second quarter.

Extensive monetary and fiscal policy packages in all affected countries and, in particular, the state-financed upturn in Chinese industrial production in the summer brought noticeable recovery effects. A second wave of infection in the fall and winter impaired the upswing but, unlike the first pandemic wave, had far less devastating effects on the global economy. However, the extraordinary burdens on economies worldwide were clearly reflected in the final statistics for the year. Global GDP fell by 2.7 percent (advanced economies: -4.8 percent, emerging economies: -1.5 percent). In the major economies, China alone achieved growth of 2.5 percent. In the euro zone (overall: -6.8 percent), countries with a high proportion of personal services, such as Spain (-11 percent) and Italy (-8.9 percent), were particularly hard hit by the recession.

The German economy followed the global trends. In the second quarter, the economy slumped by 9.8 percent and had bottomed out. Well into the fall, however, the key indicators now showed a clearer recovery in the economy from month to month. While the service sector and stationary trade continued to suffer from the consequences of the lockdowns, industrial production in particular picked up again. The strongest production growth was recorded by the IT and optical equipment sector (+ 6.7 percent), the automotive industry (+ 2.2 percent) and mechanical engineering (+ 1.8 percent). The catch-up process in the third quarter in particular ensured that the decline in gross domestic product (- 5 percent) was not quite as catastrophic as some had feared.

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Annual Report of Messer Group GmbH 2020

Annual Report of Yeti GermanCo 1 GmbH 2020

Corporate Responsibility Report 2020

In the global economy, key trends from the previous year continued in 2019. Against the backdrop of the protectionist zeitgeist, weakening industrial production and a global slowdown in trade in goods, the global economy cooled down unabated and grew by only 2.9 percent (0.7 percent less than in 2018).

The major economic powers, the United States and China, failed to match the previous year's growth rates. In the United States, the effects of tax reforms slowly weakened and the simmering trade dispute with China impacted industrial production. At the end of the year, gross domestic product grew by 2.2 percent. The trade conflict hit the Chinese economy much harder, which only became more robust in the third and fourth quarters and ultimately achieved growth of 6.1 percent - the weakest growth rate since 1990. In addition, a falling birth rate, the decreasing number of people of working age and the scenario of an aging society pointed to longer-term challenges for the economic system. The symptoms of the crisis once again did not affect the position of the Messer Group, which benefited, among other things, from flourishing steel production and once again increased earnings in China.

Growth in the eurozone was also rather meager at 1.2 percent (2018: 1.9 percent). Weak economic performance in France and Italy, strained relations between the U.S. and China, the "Brexit chaos" (according to the Frankfurter Allgemeine Zeitung on January 15, 2020) and Europe-wide structural change in the automotive industry, which is increasingly gearing its models and production to the coming era of electromobility, left their mark.

Germany also joined the ranks of the weak economic performance of the euro countries. Although gross domestic product increased for the tenth time in succession, it rose by only a modest 0.6 percent. Traditional industrial sectors such as the automotive industry (-4.3 percent) and mechanical engineering (-2.5 percent) were particularly hard hit. The construction industry and the service sector were among the mainstays of the economy. Finally, the good consumer climate in private households also played a part in preventing an even greater slump in economic output.

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Annual Report of Messer Group GmbH 2019

Annual Report of Yeti GermanCo 1 GmbH 2019

Corporate Responsibility Report 2019

In its anniversary year, the Messer Group looked back on 120 years of company history, and had to prove itself in an uncertain economic environment. With unresolved global and European political issues having a significant impact on the global economy, global growth was not quite as strong as in the previous year, but still reached a respectable level of 3.6 percent. First and foremost, the protectionist economic and trade policies of the U.S. administration led by President Donald Trump put a stop to a more vigorous expansion of global trade. His decision in spring 2018 to impose punitive tariffs on imports of numerous products from China, including aluminum and steel, unsettled companies worldwide and marked the beginning of a tough trade conflict between the two global powers. In Europe, the "Brexit" and the search for an amicable departure of Great Britain from the European Union caused unrest among numerous economic players.

Once again, the main economic regions made quite different contributions to the growth of the global economy. Falling corporate tax rates, high business investment, rising consumer spending and a stable domestic market led to unexpectedly strong growth in the US economy (+2.9 percent). By contrast, the trade dispute and a growing debt burden slightly took the wind out of the sails of the export-oriented Chinese economy, which grew by 6.6 percent, the slowest rate since 1990. The weak growth of Chinese industry did not have any consequences for Messer Group GmbH which, somewhat unexpectedly, actually expanded its business volume in China, particularly in the liquid gases segment.

In Europe, countries outside the Eurozone in particular, such as Poland with 5.4 percent, reported remarkable growth rates. By contrast, the euro countries reported declining figures. The German economy had to contend with weak sales figures in the automotive industry and special effects such as strikes and a wave of influenza, among other things, but achieved solid growth of 1.5 percent thanks to domestic stimuli (rising incomes, an increase in employment, high private consumption). The strongest growth sectors included information and communications (+3.7 percent), construction (+3.6 percent) and trade, transport and hospitality (+2.1 percent).

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Corporate Social Responsibility and Management Report 2018

Compared with the subdued performance of the previous year, the global economy was in much better shape in 2017. The impressive increase in global economic growth of 3.8 percent was due, among other things, to rising business investment worldwide and expanding global trade. In most emerging countries, economic data again gave cause for hope. Latin American countries benefited from rising raw material prices. Brazil, for example, managed to emerge from the economic trough.

The Asian countries, where foreign trade in particular picked up significantly, again recorded above-average growth. The Chinese economy remained solid, with gross domestic product rising by 6.8 percent. Although the construction industry and real estate-related services did not expand as dynamically as in the previous year, stronger industrial production, significant growth in the tertiary sector (7.6 percent year-on-year) and rising foreign demand kept the economy on track. The Asian economic region also remained of outstanding importance for the Messer Group, which, among other things, started building new air separation plants in China and Vietnam and launched a new joint venture in Malaysia.

The strong upturn in the global economy and the good economic situation in the euro zone (investment increased, employment figures rose, private consumption remained robust) also stimulated the German economy on a sustained basis. At 2.2 percent, real GDP growth in 2017 was higher than at any time since 2011. Rising demand for German products gave a noticeable boost to exports. Sales of machinery, cars and other goods abroad rose for the fourth year in a row, reaching a new peak of around 1.2 trillion euros (+6.5 percent year-on-year). Companies were also more willing to invest in machinery, equipment and vehicles (+3.5 percent). The upswing was also helped by the positive mood and the propensity to buy on the part of consumers. Good job prospects and income prospects, the European Central Bank's zero interest rate policy and basic confidence in a continuing booming economy boosted private consumption by two percent.

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Corporate Social Responsibility and Management Report 2017

The economic environment was virtually unchanged for the Messer Group in 2016. Global economic growth (3.1 percent) was in line with the previous year’s level. The industrialised economies in particular lagged behind expectations, reporting lower economic growth (1.7 percent) than they had the previous year (2.1 percent). High levels of sovereign debt, high unemployment and low growth in productivity were a burden on the economies of many industrialised countries.

The annual balance sheet for the emerging and developing economies was more favourable, achieving growth of 4.1 percent in spite of continued broad regional differences. Economically speaking, the states in Central and South America continued to experience difficulty getting back on their feet; the economic situation remained difficult in Central and Eastern Europe. On the other hand, notable rates of growth were seen in India (6.8 percent), which benefited from low energy prices and rising real wages, and in the economies of Asia (where growth averaged 6.4 percent). Important trends continued in the People’s Republic of China: government economic policies favoured domestic demand and the services sector. Economic growth (6.7 percent) remained stable and was still high.

Favourable terms for financing and a weak euro helped the eurozone cautiously increase its economic output (1.7 percent). The recession had been overcome, and yet, in too many countries, considerable levels of public and private debt, low levels of investment and political uncertainties – including the outcomes of several elections and the consequences of ‘Brexit’ – stood in the way of higher growth.

The Institute for the World Economy, located in Kiel, succinctly summed up the economic trend in the Federal Republic of Germany: ‘The German economy remains on track towards expansion in a turbulent international environment’. Following a brief period of slack in the summer, the order books for industry filled up again significantly. Prominent among the winners were companies offering intermediate and capital goods. Capacity utilisation in the manufacturing sectors was slightly above average. The construction industry (and housing construction in particular) experienced a strong boom. In addition, high levels of household consumption once again bolstered the German economy, which experienced 1.9 percent real growth in GDP.

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Annual Report 2016 - Messer Group

The global economy never really gathered steam in 2015 and expanded moderately at best. Growth in global gross domestic product stood at 3 percent – a growth figure lower than any seen since the crisis year of 2009. Among the industrialised nations, the USA still showed noticeable growth (around 2.9 percent); sustained momentum for the Japanese economy, on the other hand, was lacking (+1.1 percent). Development in the emerging economies was subdued as well. The recession intensified in Latin America, Brazil and Russia. In China, which is particularly important for Messer, the long period of stormy growth subsided.

The ‘Middle Kingdom’ had excess capacity to contend with in (heavy) industry, numerous companies with high levels of debt, and a weak domestic economy. At 5.9 percent, industrial production grew at a slower pace than it had since the economic and financial crisis began. On the other hand, the service sector rose sharply by 8.3 percent. All in all, Chinese GDP grew by 6.9 percent – a value still high by international standards and reflective of expectations of that country’s political leaders. Economic policy had committed itself to a process of transformation that specifically promoted service sectors and was geared towards a future relying less on spectacular and more on continuously stable, sustainable growth.

‘Moderate’ was also a fitting term for economic experts’ characterisation of economic trends in the eurozone. Here, low interest rates and oil prices, together with the relatively low external value of the euro, provided growth of 1.5 percent. Economic performance was encouraging in countries such as Spain and Ireland, where the economic recovery progressed in large strides. The French economy, on the other hand, lacked momentum; Italy's economic output failed to develop at the expected pace; and the economies of Greece, Croatia and Latvia found themselves in a fragile state.

The bottom line for the economy in the Federal Republic of Germany was favourable. Price-adjusted GDP here was 1.8 percent higher on the year. The most important pillar for the upswing was household consumption, fuelled by favourable developments in the labour market, high growth in employment and rising wages. Other factors contributing to overall economic growth included the construction industry, a lively upturn in the services sector and brisk foreign trade.

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Annual Report 2015 - Messer Group

Neither feast nor famine – even though some of the hopes for an above-average global economic trend went unfulfilled, the global economy still remained on a slight upswing. Real gross domestic product rose by 3.4 per cent worldwide. Among the developed countries, which had average growth of 1.4 per cent (2013: + 1.3%), the United States stood out with 2.4 per cent. Remarkable growth rates in gross domestic product were reported in India (+ 7.2 per cent) and the Sub-Saharan countries of Africa (+ 5.5 per cent).

Of particular interest to Messer was the trend seen in the Chinese economy, which, with growth of 7.4 per cent, registered development that was less pronounced than expected. Nonetheless, thanks to numerous state projects to expand its infrastructure and high domestic demand, China remained one of the mainstays of the global economy.

The crisis-hit economies of the Eurozone managed to leave the slump of the previous two years behind them. The low price of petroleum, cuts in interest rate by the European Central Bank and a low exchange rate against the US dollar led to growth of 0.9 per cent. The trend for the German economy was above-average (+ 1.6 per cent) and also benefited from strong domestic demand. The trend for key industries was varied. Electrical engineering (+ 12.7%) and motor vehicle construction (+ 10.5%) flourished, while the chemical industry (- 1.1%) was hard-hit by declining export figures to Russia.

Against a disparate overall global economic environment, revenue for the Messer Group – against even its own expectations – increased by just two per cent to around EUR 1.05 billion, yet EBITDA increased by four per cent to EUR 241 million.

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Annual Report 2014 - Messer Group

At 3.0 per cent, growth in global gross domestic product was rather modest again in 2013 and lagged behind the previous year's figure. Once again, an important contribution to the slight upturn in the global economy came from the emerging and developing economies (5.1 per cent real growth). Still, the leading regions of Asia could not regain the impressive growth figures of the past. In the People’s Republic of China, economic growth of (still considerable) 7.7 per cent stood at its lowest rate since 1999.

The economic situation in the industrialised countries around the world remained difficult. In the Eurozone, as before, the main concern remained the financial and budgetary crisis. Debt levels remained high for nearly all the states, and public and private investment was subdued. As a result, economic output in the Eurozone declined by 0.5 per cent.

The recession in the countries of the Eurozone affected the German economy as well. Its key industries, however, had difficulty staying afloat. Total revenue in the electrical sector fell by 2.1 per cent, and in mechanical engineering the real production was 1.5 per cent lower. A slight year-over-year increase was seen in the chemical-pharmaceutical industry (+2.0 per cent) and in the automotive industry (+ 1.3 per cent). After all was said and done, the German economy came away relatively unscathed, registering a modest increase in gross domestic product (+ 0.5 per cent).

The subdued global economic trend, slightly declining growth in some of the emerging economies of Asia, the euro crisis and the rather weak performance of European economies did not pass by the Messer Group without a trace. Revenue fell by around 5.7 per cent to EUR 1.03 billion; operating profit (EUR 231 million) was also slightly lower yet still surpassed the firm's own expectations at the beginning of the year.

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Annual Report 2013 - Messer Group

Over the course of the year, global economic development was subject to strong fluctuations that pushed global gross domestic product (+ 3.2 per cent) down below the previous year's figure. Beginning in the second quarter, the economy weakened in many regions. The Eurozone proved the lead ‘problem child’ of this scenario. The crisis of sovereign debt intensified, budget cuts and an unfavourable investment climate placed a burden on many of the economies of Europe. Gross domestic product in the 17 countries of the Eurozone fell by 0.6 per cent compared to 2011. The poor economic situation was then projected back onto the entire global economy. Low demand from Europe had a negative effect on economic development in China and Japan, among others.

Although industry in Germany also had the consequences of the economic downturn to contend with, the German economy held steady overall. The annual economic report of the Federal Ministry of Economics and Technology saw the German economy in a robust situation that had noticeably ebbed over the last quarter: ‘The competitiveness of the German economy is high, and despite increasing pressures and risks at home and abroad, German economic growth is robust. Employment levels and prosperity in Germany have steadily risen over the past years. Again in 2012, Germany – in contrast to the Eurozone as a whole – reported considerable growth in the amount of 0.7 per cent. Over the course of the year, however, economic momentum continuously slackened.’ As ‘central causes for the weak end of the year’, the opinion identified, ‘in addition to a significant slowdown in the global economy, particularly the uncertainty among market participants as a result of high levels of debt in the industrialised countries’ that had, ‘from the beginning of the year, had a massive impact on the German economy's willingness to invest’.

Particularly in Germany, the trend for the Messer Group was better than average and revealed a 14-per cent increase in revenue. Added to this were sustained good rates of growth in China, Vietnam, Peru and Turkey, which permitted the group of companies to increase overall revenue compared with 2011 by a full EUR 60 million.

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Annual report 2012 - Messer Group

The global economy was still in good shape in numerous groups of countries, but then the momentum for growth in nearly all of the economic regions was lost. Economic stakeholders everywhere were called upon once more to bear more of the risks for the global economy. With the sovereign debt crisis intensified in the US and in the Eurozone, and with uncertainty among investors and consumers alike, growth in worldwide real gross domestic product stood at 3.9 per cent and was lower than experts had forecast. Among the emerging and developing countries (+ 6.2 per cent growth in economic output), the sub-Saharan countries, India and China all continued to rank among the world's boom regions. However, the Chinese economy gradually lost momentum compared to previous years. Industrial production and exports declined. Economic development in the industrialised countries was significantly more modest, and with growth of 1.6 per cent these economies fell short of the previous year's growth (+ 3.2 per cent).

In the Eurozone, strict austerity policies in highly indebted countries such as Greece, Portugal and Spain put a damper on the economy. The economic growth seen in 2010, the year of consolidation, (+ 1.9 per cent) was not achieved (+ 1.5 per cent). The Federal Republic of Germany remained the locomotive for economic development within the Eurozone. During the first two quarters in particular, the German economy recovered further from the effects of the financial and economic crisis in 2008/09, sustained by high demand for exports and a steady domestic demand, and by year’s end it had registered 3.0 per cent growth in gross domestic product. All sectors contributed to the 10.9-per cent revenue growth experienced by German industry. Outstanding gains were recorded in mechanical engineering (+ 15.0 per cent), metal production (+ 14.7 per cent) and in motor-vehicle construction (+ 10.8 per cent).

By the 2011 financial year, not much of the crisis could be felt at the Messer Group, either. Excellent business in Germany, in France, in Switzerland and especially in South-Eastern Europe and China, pushed overall revenue for the Messer Group beyond the EUR 1 billion mark for the first time (EBITDA totalled to EUR 241 million).

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Annual Report 2011 - Messer Group

Things always seem to happen when you least expect them. The global economy recovered much more quickly than expected from the global shock of 2008/09. World production (+ 4.9 per cent) and world trade (+ 12.3 per cent) increased noticeably and already returned to values on an order of magnitude of those seen prior to the severe slump in the autumn of 2008. There were disparities, though, in the rates of growth and in the contribution to economic recovery by the various groups of countries. In addition to an expansive monetary and fiscal policy in many countries, it was high demand in the emerging markets that, with an average increase of 7.6 per cent of GNP, contributed significantly to global economic recovery (median growth in GDP worldwide was around 5.3 per cent). The emerging markets in South America and Southeast Asia were particularly steadfast in remaining on course. The People's Republic of China remained the flagship in Asia (+ 10.3 per cent) stoking the economy with extensive government infrastructure programmes, among other things.

The upswing was much weaker in the industrialised countries. In the European Union, uncertainty in the banking sector and in financial markets, the rise in sovereign debt and high unemployment rates led to GDP growth of just 1.9 per cent. Compared to many other European economies, the Federal Republic of Germany was far less affected by the global recession (+ 4.1 per cent economic growth). The global economic upturn and growing demand for capital goods abroad was particularly welcome in the German economy, as the Annual Economic Report of the Federal Ministry of Economics and Technology underscores: ‘Last year, the German economy grew at a rate not seen since reunification.  [...] The impetus from the foreign trade sector has long since jumped over to investment and consumption. Domestic demand is increasingly becoming the driving force for growth. The upturn is thus now on firm footing and self-sustaining.’ Indeed, the trend in business for the Messer Group was also downright remarkable, and there was an increase in the Group's operating result, EBITDA, profit after tax and in the profitability of its investments.

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Annual Report 2010 - Messer Group

The financial and economic crisis that originated in the USA in autumn of 2008 and triggered a global economic conflagration had the global economy on tenterhooks in 2009. Collapsing international trade, declining business investment and weak demand on the part of increasingly unsettled consumers led to the worst recession since the Second World War. Although government stimulus programmes, injections of capital for banks that were ‘too big to fail’ and the low interest-rate policies by central banks helped financial markets and the economy as a whole gradually stabilise in the second half of the year, real gross domestic product worldwide fell by 2.3 per cent.

The experience of the economic crisis differed, however, from one region to the next. Hardest hit by the economic turmoil were export-oriented, industrialised countries. In the United States, economic output fell by 2.7 per cent; in Japan, it fell by 5.4 per cent, and in the Federal Republic of Germany it dropped by 5.3 per cent. Nearly all of the key German industries experienced sharp drops in production. In mechanical engineering, sales collapsed by 23.1 per cent; among motor-vehicle manufacturers, sales were down 20.5 per cent; in the electrical industry, the drop was 17.0 per cent; and in the chemical industry 17.7 per cent. In the chemicals industry, business with chemical raw materials (-21.1 per cent) and man-made fibres (-24.5 per cent) was particularly hard-hit by the crisis.

The economic trend was considerably more robust in the emerging markets, such as the People’s Republic of China and India, which increased price-adjusted gross domestic product by 8.5 and 5.4 per cent, respectively. The strong economy in China also played a major role in stabilising the situation with the core business of the Messer Group. There were more minor declines in Europe, North America and Japan. Still, the still-prosperous business in China kept the Group on track, and, despite considerable setbacks in the welding and cutting sector, ultimately provided Messer with a satisfactory conclusion to the year. All in all, consolidated revenue on the year in 2009 increased by around 0.3 per cent to EUR 797 million; EBITDA was up some 2 per cent and stood at EUR 175 million.

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Annual Report 2009

The year 2008 posed a lot of challenges, and the company emerged from them even stronger. 2008 has been the most successful in the short corporate history of the new Messer World, to which Messer Group belongs as a producer of industrial gases. In spite of the economic crisis, which began back in the autumn of 2008, we have been able to achieve high growth in turnover and earnings. So my thanks go primarily to all our employees, who have contributed to this success with their committed efforts, and I thank you for your confidence.

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Annual Report 2008

Despite a rather ambivalent development over the course of the year, in 2007 the global economy remained on the whole resistant to crisis, with global gross domestic product achieving a stable rate of growth of around 5 percent. After three vigorous quarters, the last quarter of the year saw the global economy lose a significant degree of momentum. The "sub-prime crisis" in the USA, growing anxiety in the financial markets, the sharp rise in the price of oil and the rising prices of foodstuffs all had their effect on the American economy in particular, which at 2.2 percent grew more slowly than in the previous year (2.9 percent). The offshoots from this crisis also affected the euro area which increased its GDP by 2.6 percent overall; however, in the final quarter poorer results were recorded for economic production overall. This was countered, according to the analysts at the German Federal Bank, by the "threshold and raw-material countries continuing along a rapidly rising expansionary path", which applied both for the People's Republic of China which once again achieved growth in GDP of 11.4 percent, and for the Eastern European area alike.

The distinctly "more moderate pace in the euro area" was, in the opinion of the German Federal Bank "primarily due to the slowdown in growth in Germany and France". At the same time, the development of German economy kept pace with that of its global equivalent. In comparison with the first three quarters (+0.7 percent in the summer quarter), Germany's economy grew more slowly in the final quarter (+0.3 percent), finally achieving a rate of growth in GDP of 2.5 percent averaged over the year. The reasons for the downturn in the last three months lay in the level of investment in construction and weak domestic demand which also put the brakes on imports and in meagre private consumption. The chemicals industry and the mechanical engineering sector found grounds for satisfaction, having increased their production levels over the previous year by 4.5 percent and as much as 9.5 percent respectively.

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Annual Report 2007

With growth in terms of gross domestic product across the world running at 5.4 percent, 2006 saw the global economy remain on an expansionary course, supported in the first six months by the healthy US economy and in the second half of the year by the positive economic situation in the EU and Japan. Added to this were the continuing high rates of growth in the countries of the Far East (including Singapore: 7.9%, Hong Kong: 6.8%, South Korea: 5.0%, the Republic of China (Taiwan): 4.6%). The high prices of raw materials across the board exerted a braking effect, but also ensured that the supplier countries such as Russia raked lucrative takings into the national coffers.

In Germany, the economy was also seen to be in good health, with gross domestic product rising by 2.8 percent. The driving force here was private consumption once again, which also picked up under the effect of the increased rate of VAT, falling unemployment figures and rising levels of income. On the other hand, the construction sector managed to end a downward trend which had persisted over the last 10 years, recording growth of 4 percent, which was due predominantly to brisk corporate investment, thus making a significant proportional contribution towards the upturn in the general economy in Germany. Although German products had to deal with the consequences of the strong euro and rising prices in the dollar countries, exports - which once again rose by 13.7 - remained the pillar on which the economy was based. Overall, German industry recorded growth in sales of 6.5 percent, with both the chemicals industry (+6.4 percent), which generated an increase in its foreign business in particular (+7.9 percent) and the traditionally export-oriented mechanical engineering sector (= 9.8 percent, with the export share of overall growth rising to 55.7 percent) producing very good ratios.

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Annual Report 2006

In spite of considerable rises in energy and raw material prices, overall growth in the global economy continued, up by 4.8 percent. 2005 was also characterised by the striking imbalances in growth dynamics that had been in evidence for a number of years. The increase remained somewhat below average in the G7 states (the USA, Japan, Germany, France, Italy, Great Britain and Canada) which recorded a growth rate of 2.7 percent, while the annual figures for gross domestic product in, for example, Latin America or in the Far East and South East Asia were running at 8.6 percent. With an average rate of growth in GDP of only 1.3 percent, the economies in the euro area lagged clearly behind the boom regions of the global economy.

In 2005, Germany's economy developed with significant independence from the global peripheral conditions. This saw the sound global economy, for example, clearly stimulating German exports, which rose by 7.5 percent. Also serving as a driving force for economic development were investments in plant and equipment undertaken for the purpose of modernising out-of-date systems. Conversely, the perceptible rise in crude oil prices which contributed, among other things, towards driving down private domestic consumption, exerted a dampening effect on the economy. All in all, at 0.9 percent, overall economic growth was weaker than in the previous year. The production sector just failed to reach the outstanding key figures recorded in 2005, however still managed a considerable increase in sales of 4.6 percent. The most successful sectors included mining (19.7 percent), metal production (12.8 percent), the chemicals industry (6.7 percent) and mechanical engineering, which occupied the leading position in export statistics for world trade, finding customers for its products above all in the USA, France, China, Italy and also, to an ever greater extent, in India.

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Annual Report 2005

The economic revival in the United States and the continuing high rates of growth in the countries of the Far East were the primary reasons for the global economy growing as dynamically in 2004 as it had last done in the 1970s. Global gross national product was up by 5.1 percent and global trade by around 9 percent. In addition, a stimulating effect on the global economic climate was exerted by the continuing good peripheral conditions for companies in terms of financing new investments along with price increases in the equity markets. Globally, production recorded gains of around 4.5 percent. With figures of 2.8 to 3 percent, the industrialised countries in North America and Europe achieved growth rates which once again failed to keep up with the rapid industrial development occurring in numerous countries in Eastern Europe (6 to 8 percent) or in China (around 10 percent). In the wake of the sound global economy, the German economy also managed to improve its economic figures, which had been poor for the last three years, without, however, managing to create any self-perpetuating growth. Above all, it was the healthy export economy in the first half-year which suffered in the second half-year under the significant rise in the price of oil and the strong increase in the value of the euro that allowed gross domestic product to rise by 2 percent. With the participation of almost all segments, the industrial sector drove growth in sales up by 5.6 percent. Metal production rose by 16.2 percent, coal mining by 12.4 percent, the automotive industry by 10 percent, mechanical engineering by 7.1 percent, electrical engineering by 6.3 percent and the chemicals industry by 4.6 percent. By way of contrast, the economic situation in the clothing and furniture industries remained under pressure.

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Annual Report 2004

The upturn in the global economy in the second half of the year - after a rather unpromising first six months - saw global added value rising by 3.9 percent overall. There were respectable figures for growth achieved by the USA (3.1 percent), Japan (2.7 percent), the South Korea (3.1 percent) and the CIS states (7.6 percent). The global expansion of the production sector (with IT also returning unusually strong sales figures) was particularly due to the Far Eastern countries of China, Japan and South Korea.

In Germany, however, the general economic situation remained precarious and (similarly to "Euroland" as a whole), still marked by the symptoms of crisis. Corporate investments and those from the public sector were low, suffering from the expectation of low profits, with domestic demand and outlays on private consumption stagnating, the number of corporate insolvencies increased, many share prices fell, energy prices (particularly for crude oil) remained at a high level across the board and the number of people in employment fell. Even a foreign trade surplus of EUR130 billion could not stimulate the weak economy to any significant extent. As a result, gross domestic product fell for the first time since 1993, down -0.1 percent. Overall, German industry increased its sales by only 0.6 percent, however when price changes were taken into account this actually was the equivalent of a slight de facto fall. Once again, the construction and clothing industries, mining and the printing sector were affected by the recession. Stagnation had less of an effect on the chemicals industry which still managed to increase its sales by 1.6 percent, above all improving its foreign sales by 2.1 percent. In mechanical engineering, foreign demand (foreign sales rose by 1.4 percent) for high-tech products in particular still did not prevent the sector from seeing out the year with a fall in sales of 0.2 percent.

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Annual Report 2003

In 2002, the development of the global economy was determined by numerous ambivalent factors and by peaks and troughs. The crises in the last quarter of 2001 initially gave way to a perceptible upswing in the first half of 2002; however, the second half of the year saw this upswing significantly losing momentum. Although global added value rose by 3 percent, it once again failed to match the average figures recorded in the 1980s and 90s. The actual "motors" driving global wealth forward were yet again the economies of the former Eastern Bloc, the threshold countries of the Far East and South East Asia and the USA. Conversely, Western Europe, Japan, Latin America and Africa contributed little towards global growth. The reasons for this cautious global economic growth were numerous. After the attacks of 11 September, institutions and the major economic players remained nervous about the clear-cut danger of terrorist attacks and the regional military conflicts, as in the Middle East countries of Iraq, Palestine and Afghanistan. The disquiet in the financial markets and the slump in various equity prices also upset the global economic climate, as did the extensive public debate about falsified balance sheets and inaccurate auditing among large-scale corporations.

Weak domestic demand and a rather low level - viewed over the course of time - of growth in exports of 2.6 percent held back the economic recovery in Germany which achieved economic growth of only 0.2 percent. Gross capital investments shrank by a further 6.8 percent and investments in plant and equipment by as much as 9.4 percent. In production, there were numerous sectors (in particular the textiles, construction and printing industries and electrical engineering) which were affected by falling sales figures. The chemicals industry also had to deal with falling sales (-0.2 percent in comparison with the previous year), however, it did manage to increase its exports slightly by 0.5 percent. In mechanical engineering, sound foreign sales ensured that the sector recorded a slight increase in sales, up 0.3 percent. Finally, 2002 brought with it an important milestone for everyone in Germany, with 1 January seeing the introduction of the euro.

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Annual Report 2002

After the fourth quarter of 2000 saw the global economy losing some of its momentum, there was an unexpected crash in growth rates across the world. In global terms, the economy achieved a rate of growth of only 2.3 percent, and world trade just 1 percent. The seven leading industrial nations also suffered reverses and produced an average rate of growth of 1.2 percent. The reasons for this were that the economy of the United States dipped appreciably, oil prices were soaring, the "New Economy" (particularly the telecommunications and media sectors) turned out to be much more susceptible to crisis than had been anticipated and the terrorist attacks of September 11 unsettled the major economic players. Unchanged high rates of growth were recorded by the economies of Central Eastern and Eastern Europe (2000: 6.6 percent, 2001: 5 percent, CIS states overall: 6.2 percent).

The slump in the global economy had a direct effect on the German economy which could record no more than a slight increase in gross domestic product of 0.6 percent. The falling demand in Asia and reduced business with the USA imposed a burden on production companies which, all in all, cut back considerably on their investments; the chemicals industry was also unable to escape the effects of the global crisis. In numerous European countries (among other things due to the weak economic situation in the automotive sector) lower production figures were recorded. This saw the chemicals industry suffering a fall in sales of 0.9 percent, down to 1.8 percent. The most successful business continued to be done in the biotechnology, pharmaceuticals and hygiene articles sectors. Mechanical engineering was still strong, having once again increased its sales by 1.8 percent. Once the current orders had been worked through, however, demand fell away distinctly through to the end of the year.

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Annual Report 2001 (German)

At the start of the new millennium, and, particularly, in the first half of the year, the global economy appeared to have recovered from the crises of the 1990s and grew overall by 4.8 percent. Global trade expanded by an extraordinary high 13.4 percent, the global currency system appeared stable and raw material prices remained low, with the exception of energy prices. However growth in the main industrial countries did vary. The USA, Canada, Ireland, Finland, the South Korea and the Republic of China (Taiwan) made a particular contribution towards global growth. At the same time, the countries of Eastern and Central Eastern Europe and the threshold countries of the Far East and South East Asia were among the regions displaying the most notable growth rates.

The booming global economy also stimulated the economy of Western Germany. With an increase - slightly below average in the international comparison - of 3 percent in gross domestic product (priced in 1995 terms), the German economy grew at a rate in excess of anything seen since reunification. The sound economic situation in industry was due primarily to the notable level of foreign orders, which displayed a clear rate of increase, up 17.5 percent, with, conversely, the rise in oil prices and the devaluation of the euro resulting in low domestic demand. Both nationally and internationally, the chemicals industry was one of the main growth sectors. With domestic demand recovering in Germany and exports increasing by as much as 18.3 percent, both production and sales picked up sharply, with overall sales rising by 11.2 percent over the previous year. After the crisis of 1999, mechanical engineering also displayed a clear-cut recovery and increased its export figures by 11 percent and its sales by 7.1 percent, also thanks to the brisk demand from German industry.

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Annual Report 2000

The global economy recovered from the severe financial and economic crisis of the previous year more rapidly than anticipated displaying - in the words of the German Federal Bank's economic report - an "unexpectedly high degree of dynamism" in the second half of the year and recording an increase in global gross domestic product of 3.3 percent. In the Far East and South East Asia, a bundle of economic and fiscal policy measures gave rise to a further notably good rate of growth of 4.5 percent and a fall in the rate of inflation from 19 to 5 percent: loans from the International Currency Fund stabilised the affected currency systems and made it possible to develop banking systems less susceptible to crises. At the same time, numerous direct investments from abroad and packages of reforms aimed at overhauling the public budget in the affected countries helped to deregulate markets and to prevent outflows of capital.

With the German economy still suffering under the effects of the 1998 global crisis in the initial six months, some relief was provided by the healthy economy in the USA, the rapid recovery of the economies of South East Asia, the healthy condition of foreign business also bolstered by the devaluation of the euro, and a stable level of private consumption, making it possible for gross domestic product in 1999 to increase by 1.5 percent. The production sector had to combat a poor level of domestic demand, primarily for the products of the investment goods and textiles and clothing industries, and managed only weak growth of 0.7 percent. However, as a branch of industry with a high capacity for innovation, the chemicals industry did better than average, benefiting particularly from the recovery in the USA and the Far East and increasing its sales by 3.6 percent. Mechanical engineering did less well with sales falling by 0.1 percent. The primary negative factor here was the reluctance of companies to undertake investment in their machinery plants.

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Annual Report 1999

After it had become impossible to ignore the signs of a severe oncoming recession (as early as the autumn of the previous year), the development of the global economy in 1998 was dictated by the currency and financial crisis in the Far East and South East Asia, the persistent poor condition of the Japanese economy and Russia's economic difficulties. Whilst Hong Kong, Singapore, South Korea, Taiwan, Thailand, Malaysia, Indonesia and the People's Republic of China were regarded in the 1990s as particularly dynamic economic regions, in some cases categorised by the International Monetary Fund as "advanced economies" since 1997 (Hong Kong, Singapore, South Korea, Taiwan), this rapid rate of growth came to a sudden end. Numerous investments (above all in Thailand and Malaysia) were based on irresponsibly issued loans granted by the banks on the assumption of continuing growth rates. In 1997/1998, these institutions encountered great difficulties threatening their existence, as there were more and more instances of these loans not being repaid. Furthermore, the crisis was greatly exacerbated by the severe overvaluation of many far Eastern currencies, the temporarily horrendous level of foreign debt and the recession at the time in Japan, one of the most important trading partners in the region. This led to the collapse of banks and currencies, falling prices, company insolvencies and mass redundancies. In Indonesia, for example, gross domestic product fell by 13.7 percent, in Thailand by 8 percent, in South Korea by 5.5 percent and in Hong Kong by 5.1 percent.

Overall, the German economy managed to sustain its position throughout the crisis in the Far East, increasing its gross domestic product by 2.8 percent in real terms. Investments in plant and equipment increased, private consumption remained on a level plane and the number of people in employment rose. Thanks to its willingness to undertake innovation and the high demands for its high-tech products, mechanical engineering was one of the most profitable branches of industry with a rate of growth of 6.3 percent. By way of contrast, the chemicals industry felt the full force of the crisis in the Far East. With exports to the Far East (and Latin America) falling sharply, overall sales in the sector were down by 1.6 percent.

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Annual Report 1998 (German)

Right through to the autumn, the global economy was characterised by high rates of growth, achieving a rate of growth in global gross domestic product of 4 percent, and a figure of 9.4 percent for global trade as a whole when averaged over the year. This growth in global trade was primarily driven forward by the USA, Canada, expanding economies in Western Europe such as Finland, Spain and the Netherlands, as well as by Asia's booming centres such as Taiwan, Singapore and South Korea. In the fourth quarter, however, the first signs of upheavals in the economic and financial systems in the Far East arose, and, in the following year, these would prove to be the forerunners of a far-reaching recession.

Exports, flourishing again, and the higher level of willingness to undertake investment in the exporting industry were responsible for Germany increasing its gross domestic product by 2.8 percent in real terms. The processing industry (production excluding construction) increased its sales by 4.3 percent – a notable result which, in many sectors, was based on increasing production by means of automation processes, cuts in the workforce and modest wage increases. All of these measures contributed to a reduction in the pressure exerted by industrial wage costs and maintaining competitiveness on the international scene. The reasonable demand for innovative products, the increase in productivity and competitive prices assisted the chemicals industry out of a phase of stagnation and helped it to increase its sales by 7 percent. Mechanical engineering also presented a healthy picture, cutting its personnel costs by reducing the workforce, increasing its export ratio (over 60 percent) and recording sales up by approximately 4 percent at the end of the year.

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Annual Report 1997 (German)

In the opinion of the German Federal Bank, in growing by 4 percent in 1996 the global economy was "marked by a generally improved [...] environment". On average, the industrialised states of the West recorded a growth of 2.3 percent, slightly below the figure for the previous year (2 percent). Once again, the most enduring impetus for growth was to be found in the developing and threshold countries of the Far East and South East Asia, which relied on an extremely fast-tracked process of industrialisation, the state-supported expansion of companies, the export of finished goods to industrialised nations in the West and direct investment from Western European companies looking to exploit the opportunities in the Asian Pacific area. In 1996, the growth rates of the "Tiger Asian Economies" achieved respectable values once again, recorded at between 4.5 percent in Hong Kong and 9.7 percent in the People's Republic of China (Thailand: 6.7 percent; Singapore: 7 percent; South Korea: 7.1 percent; Indonesia: 7.8 percent; Malaysia: 8.4 percent; Vietnam: 9.5 percent).

In Germany, the economy continued along a path of modest growth and achieved a slight increase in its gross domestic product (+1.4 percent). Things did not go so well for industrial production, which found itself faced with a disappointing level of willingness among companies to undertake investment, and had to deal with poor domestic sales in terms of consumer goods as well and fell by 0.4 percent compared with the previous year. The construction trade alone had to come to grips with a drop in sales of almost 10 percent. Things were also difficult for the chemicals industry which recorded sales down by 3 percent, and for mechanical engineering, which felt the effects in its foreign markets of the competitors from the Far East and the USA with their low-cost production, managing to improve overall sales by only around 2 percent.

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Annual Report 1996 (German)

At a growth rate of 3.5 percent, the global economy progressed at the same level as in the previous year. The characterising features remained the disparities between the major economic regions: whilst the economies of the Western industrialised states lost momentum over the year (ultimately achieving a growth rate of 2 percent in gross domestic product in real terms), the national economies in the threshold countries of the Far East and South East Asia were booming, increasing their economic output by a combined 7 percent. The global economy was further characterised by the process of globalisation, which picked up again in the middle of the 1990s and which was already being reflected in the objective economic figures on the development of global trade: between 1975 and 1995 the proportion of global exports for goods in terms of global goods production increased by around 10 percent to 20 percent.

In Germany, the hope of finally being able to overcome the severe recession of the early 1990s turned out to be over-optimistic. Economic growth dipped into a slight downturn, at a figure of just under 2 percent, while industrial goods production recorded an increase of no more than 0.5 percent in the wake of slumps in the second half of the year. The high valuation of the German mark imposed a burden on traditional exporting; companies chose not to increase their investments in Germany, the number of insolvent companies rose, and unemployment increased yet again. In the chemicals industry sales figures rose slightly (overall sales for 1995: DM 234.6 billion), while sales in the companies of the former GDR exceeded those in the "old" federal states for the first time as a result of the organisational restructuring and technical modernisation they had undergone. As in the previous year, mechanical engineering was going through a phase of gradual recovery, recording a moderate increase in sales at the end of the year.

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Annual Report 1995 (German)

The development of the global economy was characterised by the revival of the economy in North America, Western Europe and Japan, the strong growth of the economies of the threshold countries and low material prices as well as falling economic capacities, as was seen in Africa or in individual countries of the Eastern European "reform" states where industrial production fell considerably. This saw the global economy rising by 3.7 percent, a figure not seen at any time in the previous 5 to 6 years.

In Germany, a slow recovery followed on from the far-reaching effects of the crisis. Brisk demand from abroad and the sound economic situation in the construction trade were the main reason for gross domestic product once again increasing by 2.9 percent. In Western Germany, there was a noticeable increase of 7.7 percent in export demand, with companies increasing their capital investment by 1.2 percent. The progress being made with privatisation and the considerable public transfer payments from west to east drove forward the catch-up process in Eastern Germany. The construction sector recorded 25.4 percent and the production sector 16.9 percent more orders than in 1993. Nevertheless, throughout the entire territory of Germany as a whole, unemployment was still giving grounds for concern (with statistics showing 3.7 million people out of work) along with the numerous company collapses (with the Germany-wide figure of companies hit possibly in the region of 25,000). At the end of the year, the chemicals industry returned a split report. Whilst the increase of 6.4 percent in sales signalled the end of the crisis, rationalisation strategies were resulting in a further fall in the number of people in employment, with this figure falling from 654,800 to 561,000 in the chemicals sector between 1992 and 1994. Germany's mechanical engineering sector returned a similar picture, profiting from the pickup in the economy at home and abroad and increasing its sales by 2.3 percent, while reducing its workforce from 1.12 million (1993) to 947,700 at the end of the year.

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Annual Report 1994 (German)

Overall, the balance of the global economy, which had been weak since 1990, continued along the same lines in 1993, with a level of global growth of only around 2 percent being achieved. However, more and more indicators were pointing towards a change in the trend. The USA (+3 percent), Canada (+2.4 percent) and Great Britain (+2 percent) had again generated decent rates of growth. Conversely, of the industrialised Western states, Sweden, Switzerland, Italy France and Germany, among others, returned weak growth figures.

In the fourth year after die Wende, the "old" Federal Republic even fell prey to its most serious economic crisis since its foundation. The ongoing fall in demand from abroad, exaggerated expectations of the Eastern German markets and high wage increases affected production, above all giving rise to a fall of 1.2 percent in gross domestic product in real terms in the reunited Germany. However, in Eastern Germany, the process of privatisation being forced through by the Treuhand agency was having a positive effect on the development of gross domestic product in real terms, with this showing a further increase of 7 percent.

As it bit, the crisis did not spare either of the two flagships of the industrial sector. The chemicals industry in both Western and Eastern Germany had to come to terms with the most serious collapses since the two German states were founded and suffered a downturn in real sales figures of 7 percent, with the cause of this being found in the liquidation of no longer competitive chemical companies in the former GDR and sector-specific sales crises. This saw paints and lacquers, fertilisers and products in the pharmaceuticals industry generating distinctly less demand than in the past. Things were a little better in mechanical engineering, which was feeling the direct effects of a lack of investment in industry and trade as well as having to come to terms with the winding up of companies in Eastern Germany which were no longer profitable and now out of date. In real terms, overall sales in the sector fell by around 10 percent, with foreign sales down by 4.6 percent.

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Annual Report 1993 (German)

Similarly in 1992, the global economy developed very slowly, with an increase in global added value of around 1 percent. Once again, a notable feature was the clear differences between the different groups of countries. Within the industrialised states, the economic situation improved in countries like the USA and Canada, while Japan, Italy and Germany presented rather weak figures. The countries from behind the former "Iron Curtain" continued their economic collapse; at the same time, the threshold countries in the Far East underlined their status as centres of significant growth.

"Influences exerting an external retarding effect" - according to the analysis of the German Federal Bank - "but also home-made braking factors" dictated how the economy of the Federal Republic developed. In Western Germany, this process did not really get under way, suffering under the effect of weak export business and high pressure from wage costs, rising by no more than 0.9 percent in real terms (gross domestic product at 1985 prices). Eastern Germany presented an ambivalent economic picture. For one thing, domestic demand and investment in the construction sector were clearly picking up, whilst on the other hand the erosion affecting markets in Eastern Europe represented a negative factor for the economy.

There was a distinct economic slump in important industrial branches of the newly united Germany. In mechanical engineering which suffered a collapse of 6 percent in sales in real terms, the poor demand from traditionally important customers abroad and the more cost-effective competition present in the countries of the Far East drove foreign sales figures down by 3 percent. At the same time, at home the closure of numerous technically outdated works imposed a burden on the sector. The primary characterising factor for the chemicals industry was the regional disparities between West and East. In the "old" Federal Republic, sales rose slightly by 1.1 percent. Conversely, after the winding up of many no longer profitable companies and the modernisation of numerous plants, this sector in the former GDR remained stuck in a structural crisis, suffering a 10.5 percent fall in sales.

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Annual Report 1992 (German)

With the global economy having already cooled down distinctly in the second half of the previous year, 1991 saw the world economy bottoming out and even falling below the figure for the previous year (- 0.3 percent). In the former "Eastern Bloc" and Comecon countries, economic capacity fell by 12 to 15 percent in real terms, the economies of the Northern European and Anglo-Saxon countries stagnated, with an industrial nation such as Japan achieving only moderate growth.

The general situation in the Federal Republic was dictated largely by the process of unification of the two German states, previously separate entities. The great demand from Eastern Germany kept the economy of Western Germany on the move, with this also absorbing a reduction in export business, increasing gross national product by 3.1 percent in real terms. In the federal states of the former East Germany, the trend in the economy was characterised by a considerable slump in industrial production (due to the winding-up of the transferable rouble system and the collapse of demand structures in the former Comecon states) and a far-reaching process of adaptation (abandonment of out-of-date factories, etc.).

The weak economy in important industrial nations also had its effect on the chemicals industry, which on the whole stagnated across the world. Similarly, in Western Germany, the sector could do no better than a modest increase in sales of 1.9 percent; however, in the global trade of chemical products, it still retained its ranking as world leader (ahead of the USA and Japan). With the chemicals industry in Eastern Germany now having no chance in international competition, numerous businesses were liquidated or modernised at considerable financial expense. There were setbacks against the background of a weak global economy for mechanical engineering (in Western Germany) as well, with the sector managing to increase its overall sales by only 2.5 percent (with foreign sales actually falling by 6.1 percent).

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Annual Report 1991 (German)

In contrast to the early 1980s, the rate of growth of the global economy fell again. With the global peripheral conditions deteriorating over the course of the year – due in part to the military conflicts in the Persian Gulf – at year-end, the rate of growth recorded around the world was 2.2 percent in real terms. Within the group of industrialised nations, the USA, Canada, Great Britain, Italy, Sweden and France were among the countries with weaker growth figures. By way of contrast, Japan, Belgium, the Netherlands and Germany recorded above average growth rates in 1990.

With foreign trade presenting record balance sheets, domestic investment reaching record values (capital investments increased by 12.4 percent, building investments by 11.4 percent, investment in plant and equipment by 7.1 percent), private consumption increasing steadily by 4.4 percent, prices remaining stable and the impending reunification of Germany (and the opening up of numerous Comecon states within the context of die Wende, the major upheaval taking place in Eastern Europe), and demand for consumer and investment goods being stimulated, the economy of West Germany presented a distinctly sound picture. Gross domestic product in real terms rose by 4.5 percent - a rate of growth which had not been achieved in the Federal Republic at any time since 1979.

Strong domestic demand also kept the production sector on track for success, driving its sales up by around 4.5 percent in real terms. Germany's chemicals industry was caught up in the rather complex situation affecting the sector across the world (suffering in numerous countries from, for example, weak demand in the automotive sector and in the textiles industry), achieving a lower level of growth than in the previous year, at only 1.6 percent. Conversely, the strong interest being shown in tool making, printing, paper and textile machinery kept mechanical engineering well on course, with the sector generating increased sales, up 8.3 percent.

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Annual Report 1990 (German)

Without reaching the high rates of growth of previous years, overall economic growth increased by 3.5 percent in real terms, with raw material and energy prices remaining generally low. Of the Western industrialised nations, it was primarily the USA, Canada and Great Britain which recorded lower rates of growth than in the previous year. The early 1980s had seen a noticeable relocation of global centres of growth. The threshold countries or (according to UN terminology) the "medium-income countries" (such as Singapore, Hong Kong, the Republic of China (Taiwan) and South Korea) emerged as competitors for the traditional industrialised nations on the global markets for mass products, on the basis of ready technology, cheaper trained labour and mass production (textiles, electrical articles, clothing, etc.).

Although the international environment did not offer the optimum peripheral conditions, the German economy still managed to improve its economic balance sheet once again, increasing its gross domestic product by 4 percent in real terms. The German Federal Bank identified the reasons for this strong growth as lying in the "rapid expansion of foreign demand", benefiting "uninterrupted dynamic growth among the European partner countries" and the growth of domestic investment. This healthy economy was also reflected in the results from the secondary sector: industry increased its overall sales by 8.7 percent, the number of people employed in production had long since been on the increase and the number of corporate insolvencies fell. Apart from a few sectors such as mining, the clothing industry and shipbuilding, all branches of industry saw their profits rise. With its main customers in the USA and France, mechanical engineering recorded rates of growth in sales of 9.6 percent. In the chemicals industry, which achieved an overall increase of 7.4 percent in its sales, business involving plastics, paint and lacquer, cosmetics and industrial chemicals emerged as particularly profitable.

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Annual Report 1989 (German)

The stable growth in the global economy - which rose by 4 percent in real terms - continued into 1988. Development in the OECD states was characterised by healthy economic growth in Japan, North America, Spain and Great Britain, a clear-cut increase in industrial production which rose by around 7 percent, and a lively level of foreign trade which rose by 5 percent in real terms in the industrialised countries of the West.

With the German economy expanding, especially in the first and third quarters, the economic boom underway since the early 1980s pressed ahead at a considerable rate once again. The German Federal Bank attributed the real growth in gross national product of 3.4 percent back to "domestic demand" – besides the flourishing foreign trade – as the "main engine driving on economic growth". Both the increase in private consumption and the numerous corporate investments resulted in overall domestic demand rising by 3.5 percent in real terms, a notable result by international comparison. The production sector overcame the months of stagnation, increasing sales by 5.8 percent and net production by 4 percent.

Germany's chemical companies also participated in the global growth of the chemicals industry, generating capital from the sound profit situation in the textiles industry, in vehicle manufacture and in pharmaceuticals. Overall sales for the sector increased by 6.5 percent, due to expansion mainly in the plastics, cosmetics and industrial chemicals segments of the business. Mechanical engineering made a considerable contribution towards the rising production figures, also increasing the production of construction machinery in comparison with previous years, and generating an increase in sales of 8.3 percent.

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Annual Report 1988 (German)

Similarly in 1987, the world's economy was characterised by a generally moderate – but still constant – growth of around 3 percent. However, in comparison with the previous year, industrial production continued to rise, up by 3 percent in the industrialised nations of the West. Nevertheless, the German Federal Bank still identified reasons to issue warnings of "long-term disruptions in the global economy". Identified by the experts as risks for the structural stability of the global economy were "the continuing imbalances among the major industrial countries", the "at times drastic fall in the dollar rate", the "collapse in the international equity markets" and the "unsolved debt problems in developing countries".

Among the important characterising features of the German economy in 1988 identified by the Federal Ministry of Economics in its Annual Economic Report were again the stable rate of growth, although 1.7 percent lower in real terms than in previous years, the higher level of price stability in terms of cost of living (+0.2 percent), the increase in private consumption (+3 percent) and the high foreign trade surplus. While, globally, the chemicals industry continued to grow, in Germany this sector presented a rather modest figure, recording a rate of growth of 0.2 percent. The products most in demand were plastics, organic industrial chemicals, beauty products and photographic and adhesive materials. Conversely, business involving materials for plant protection and fertilisation were marking time. As over the course of the year the DM gained in value on the financial markets, the mechanical engineering sector suffered in terms of exports, but still managed to increase its sales by 2.2 percent.

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Annual Report 1987 (German)

The trend for moderate growth (+2.5 percent) accompanied by noticeable country-specific variations continued to dictate the development of the global economy in 1986. In the OECD states, national economies were characterised by a similarly moderate rise in gross national product (also +2.5 percent), a slight increase in domestic demand, a moderate increase in foreign trade resulting from the fall in the US dollar rate, a barely appreciable fall in unemployment and low rates of inflation. There was more dynamic development in some "threshold countries". For example, the People's Republic of China increased its industrial production by 11.1 percent and in the Republic of China (Taiwan), overall economic growth of 10.8 percent was achieved, mainly on the back of industrial goods exports.

In the Federal Republic, the rate of economic growth remained practically constant, at 2.4 percent in real terms. Other characterising features were the noticeable increase in private consumption, price stability, a reduction in government expenditure rate, but also a practically unchanged unemployment figure of 2.22 million (1985: 2.38 million), with corporate insolvency figures still hardly falling at all (1986: 18,840; 1985: 18,870). In the industrial sector, it was only in the production of consumer goods that it proved possible to achieve higher sales than in the previous year (+1.8 percent). Raw materials and capital goods industries developed to a less satisfactory degree and the rate of production growth in the secondary sector overall was cut by half (+2.5 percent).

Even with the sound economic situation in the automotive and textile industries and the falling prices for raw materials such as oil and coal generally providing the basis for solid growth in the chemicals industry, German companies still fell far short of the high rates of growth achieved in previous years, recording a fall in sales of 5.4 percent as a result of reduced prices. The high level of demand in the machine tools business segment, however, provided German mechanical engineering with an above average increase in sales of 3.7 percent. The number of people employed in mechanical engineering also rose by 3.7 percent, thus underlining its position as the industrial sector in the Federal Republic accounting for the largest number of employees.

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Annual Report 1986 (German)

Without managing to reach the high rates of growth of the previous year, growth in the global economy continued in 1985, albeit at a slower rate. The overall balance for the OECD states was hindered by the fall in industrial production – in comparison with 1984 – in important industrialised countries such as the USA and Japan. With an increase in their gross domestic product of 2.7 percent in real terms, these reported a result that was slightly down on the global rate of growth of 3 percent.

In the Federal Republic, the Federal Ministry of Economics considered that "the economic upturn [...] was becoming significantly stronger". The key economic figures provided firm support for the positive picture drawn by the Annual Economic Report for the year and demonstrated that the German economy was developing appreciably on the international level. Private consumption picked up, foreign trade surpluses were considerable, the growth in gross domestic product (+2.4 percent) forged ahead, especially in the second and third quarters, the number of people in employment rose by around 250,000 and the 1.8 percent rate of inflation indicated that prices were stable. The upturn continued, especially in the secondary sector. German industry managed to increase its domestic orders by 3.7 percent and orders from abroad by 7.8 percent, finding itself in an extremely healthy position at the end of the year with a rate of growth in production of 5 percent in real terms.

Across the globe, the chemicals industry made full use of falling oil prices and the sound economic state of the automotive and textile industries, as well as of plastics production and processing. In Germany, overall sales in the sector rose by 5 percent. The high level of capacity utilisation among businesses in the machine tools and printing, textiles, paper and plastics machinery sectors provided mechanical engineering with greatly increased sales, up 12.6 percent. After reductions in personnel had been one of the contributory factors to the health of the sector for years, the number of people in employment once again rose by 2 percent to stand at 950,200.

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Annual Report 1985 (German)

As the appetite for investment in industry and private consumption picked up across the world, the global economic upturn in 1984 gained stability. Among the industrialised nations of the West, this saw in particular the USA, with an increase in gross national product of 6.9 percent, and Japan (+5.5 percent) achieving outstanding rates of growth. Both of these states were outperformed by countries in Asia. For example, the People's Republic of China announced a growth in gross domestic product of 13 percent and a growth of 14 percent in the figure for gross industrial production.

The upswing from the previous year was also consolidated in the Federal Republic. The increase in gross national product (+2.6 percent in real terms), the rises of 2.4 percent in retail sales figures, of 6.7 percent in the wholesale sector and of 6.5 percent in the industrial sector indicated that the difficult economic times experienced in the early 1980s had finally been overcome. Unlike the previous year, it was now rising demand from abroad and increasing exports which were driving forward the economic upturn in industry, an upturn which manifested itself in particular in the raw materials and capital goods sectors with an increase in sales of 6.1 percent and in production of 4.3 percent in real terms. Reaping the benefit of the healthy economic situation in the automotive and textiles industries and in plastics processing, the chemicals industry achieved above average rates of growth. There was a nominal increase in overall sales, up 10.3 percent, and the number of people in employment increased slightly by 0.3 percent to around 550,300 in spite of the continuing processes of rationalisation. Investments in industrial companies in the machine tools and textiles, plastics and printing machinery sectors picked up again, providing decent profits also for mechanical engineering, with this sector achieving a nominal increase of 6.6 percent in its sales.

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Annual Report 1984 (German)

The global recession came to an end in 1983 and was succeeded by a phase of steady global growth. With the US economy having recovered slightly in the fourth quarter of 1982 and consolidating this growth in the following months, "expansive forces" came to dominate in the Western industrialised countries as well, such as Japan, Great Britain and the Federal Republic, as confirmed by the five leading economic research institutes in their reports. In the OECD states, the rise in gross domestic product (+2 percent in real terms) stimulated foreign trade and low rates of inflation boosted the general economic situation.

In the Federal Republic, we saw the beginning of a boom period which was to last for around seven years. Rising domestic demand (primarily rapidly expanding private consumption), the flourishing export economy, especially in the second half of the year, which once again recorded better figures fuelled by a rise in foreign demand, saw an increase in gross domestic product of 1.3 percent in real terms at the end of the year. An interesting aspect here is the regional differences within Germany: Bavaria (+2.4 percent), Baden-Württemberg, Rheinland-Palatinate and Hesse achieved above average rates of growth in gross domestic product, while the federal states in the north of the country recorded varying rates. German industry also matched the globally high rates of increase in industrial production, increasing its overall sales by 1.5 percent in real terms and returning good results, particularly in the raw materials and capital goods sectors. The chemicals industry profited greatly from the sound economic conditions enjoyed by its customers in the automotive, construction and textiles industries and in plastics processing. Chemicals recorded a 7 percent increase in overall sales in real terms in the Federal Republic. However, the balance for the year in the German mechanical engineering industry was tarnished by falling sales figures, with this sector being affected by a fall in demand from companies in the large-scale plant and power station construction sectors, and for foundry and mining machinery.

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Annual Report 1983 (German)

1982 saw the global economy suffering its most serious recession since the end of the Second World War. Economic development in the industrialised countries of the West was dictated by an inadequate level of economic growth, high unemployment figures, a fall in industrial production, a reduction in investment, rising national debts and unfavourable payment balances in foreign trade. Of the leading industrialised nations, only Japan achieved any growth worth talking about in terms of real gross national product (+2.7 percent) and industrial production (+1.1).

In the wake of a global recession, 1982 also saw the Federal Republic being overtaken by a "serious crisis in growth and employment", which was how the economic situation was summed up by the Federal Ministry of Economics in its Annual Economic Report, which identified the following reasons: "This economic slump is affected both by the challenges and difficulties facing the global economy and also by poor domestic developments. [...] The necessary adjustments in response to the wide-ranging changes in the supply, demand and cost structures in the global economy have, for some time now, not been taking place as smoothly as in the past. Above all, we have not seen the innovations and investments to the extent urgently required for the creation [...] of an adequate number of jobs".

As the sharp fall in domestic demand, especially in the second half of the year, resulted in collapses in economic performance, the possibility of growth in gross domestic product was excluded (-0.6 percent). Industrial production fell by 3.1 percent and the number of insolvencies reached a record high of almost 15,900, with unemployment figures rising further to 1,833,000. Nor was the chemical industry spared from the severe recession, still only achieving a level of capacity utilisation of approximately 70 percent and having to record a fall in sales in real terms, for a nominal increase of 2.7 percent. The German mechanical engineering industry held its sales figures at quite a stable level, cementing its position as the world's largest exporter of machinery.

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Annual Report 1982 (German)

Across the globe, in the wake of the sharply increased energy costs and the high interest rate policy in the United States, falling levels of economic performance, rising rates of inflation and unemployment figures dictated the development of economies. Ultimately, in 1981 the OECD states were unable to better an average growth rate of gross national product of 1.2 percent. In almost all industrialised states, stagnating or falling production figures were the characterising features of global industrial production. Only in Japan was industry able to achieve a high rate of growth of 4 percent.

Being in many respects dependent on the trend in the global economy, the Federal Republic was unable to break out of this economic slump. Private consumption and investments on the part of both private companies and public sector fell markedly, with the number of registered unemployed rising to 1.27 million. Particularly as the collapse of the economy came in the first half of the year, gross national product rose by a practically negligible 0.2 percent in real terms. It was only the sound situation in the export economy, profiting from a devaluation of the DM in real terms, which prevented further economic damage. The production sectors (industry, trade, mining) still held up really well in comparison with other Western industrial states, recording falls in production of around 1.8 percent. High raw material and energy costs, overcapacities in a few production sectors and high costs resulting from the rising dollar exchange rate affected more than just the results of the chemicals industry in Germany, which increased its sales figures by only 2 percent in real terms. Furthermore, German chemical companies were increasingly having to deal with competitors from Spain, Saudi Arabia, Mexico and Yugoslavia on the global markets. New competitors in the sector from countries such as Taiwan, South Korea and Brazil also appeared for the German mechanical engineering industry which, likewise, only managed to increase its sales slightly (1980: DM 122.78 billion; 1981: 125.61 billion).

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Annual Report 1981 (German)

In what was termed the "Second Oil Crisis", many of the economies of Western and Eastern Europe, and those in the developing countries, were affected by sharply rising energy prices, falling victim to a recessionary trend. In all of the OECD states, this stagnation in key industrial figures could be traced back to comparable causes. Apart from high energy costs, the high level of wages (especially compared with the up-and-coming, export-oriented developing countries), out-of-date production plants, demand saturation in numerous branches of industry and interventions at the level of currency policy (e.g. increasing interest rates and making loans more expensive with the intention of holding back inflation), all frequently restricted the further expansion of the industrial sector.

The optimistic economic forecasts put forward by experts for 1980 which, for the Federal Republic of Germany for example, according to the "Five Wise Men", predicted real growth of 2.5 to 3 percent in gross national product failed to materialise under the effects of the crisis affecting the global economy. From the spring onwards, the economy weakened to an ever more significant extent. As in the first quarter, there had still been quite high growth figures achieved, at the end of the year the figure for real gross national product was up by 1.8 percent. In the secondary sector in the Federal Republic - which was unable to increase overall production - there were still expanding branches of industries, such as the office machinery and EDP sector, the glass industry, steel and light metal construction, the precision mechanical and optical industries and paper processing. Finally, mechanical engineering recorded an increase in sales of 7.5 percent, making it one of the growing industries. Conversely, metallurgy, casting, automobile construction, the clothing industry, leather production and processing and the chemicals industry underwent a period of weak growth. Suffering under the effects of increased raw material and energy costs as well as overcapacities in some production sectors and the competitor chemical companies in developing countries, West German businesses realised no growth in sales (with sales figures instead falling by 7.4 percent in real terms).

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Annual Report 1980 (German)

In 1979, the economic development of Western industrialised countries, which managed to increase their gross national product by 3 percent in real terms, was characterised by a generally uniform curve: the economic upturns of the initial six months flattened out considerably - albeit with regional variations - over the course of the year. Considerable momentum was lost by the economies of the USA, Great Britain and the Netherlands, with, for example, Japan providing a contrast thanks to its booming industrial goods exports, rendering it largely immune to the global downwards trend.

In some aspects, the economy of the Federal Republic developed rather more favourably than those of comparable industrialised countries. Gross national product increased by 4.4 percent in real terms, and exports by 7 percent. With a rate of capacity utilisation of 84.4 percent, industry generated a growth rate of 5.6 percent and increased its overall investment in comparison with the previous year by 14 percent. At the same time, averaged out over the year, the unemployment figure fell to 876,000 (-11.8 percent). Although the results for the chemicals industry were affected negatively in the industrialised countries of the West by the rises in the price of oil and raw materials and by instances of overcapacity in various segments, the chemical companies in the Federal Republic still managed to increase their sales from DM 110.61 billion (1978) to DM 126.27 billion. Overall, the sector invested around DM 6 billion, distributed in equal thirds to the expansion of capacity, necessary replacements and the rationalisation of production processes. Mechanical engineering was also notable for its stable growth, achieving an increase in sales of over 5 percent.

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Annual Report 1979 (German)

The flourishing US economy and the upturn in the Japanese economy meant that the global economy was again growing at a faster rate, with the industrialised countries of the West recording an increase of around 3.5 percent in gross national product in real terms. However, the economic recovery was particularly based on national economic programmes and not on any self-supporting upswing. Furthermore, the EC states were clearly overshadowed by the USA and Japan. While the USA achieved a 7.7 percent rate of industrial growth, the countries of the EC managed no more than an average of 2.3 percent. Generally, the specific problems facing European industry were the increased prices of oil and raw materials, severe fluctuations in exchange rates, out-of-date production plants and the increasing competition from countries in the Far East with their cheaper production.

Generally speaking, the economy was developing more positively in the Federal Republic than in many other EC states. Real gross national product (+3.1 percent) and industrial sales growth (+3.8 percent) exceeded the values for most of the member states, and, for the first time since 1974, the number of unemployed fell below the 1 million mark to stand at around 992,950. However, neither the chemicals industry nor mechanical engineering made any great progress. Rising material costs, overcapacities (especially in the chemical fibres, plastics and fertiliser segments) and an unfavourable trend in prices prevented any great progress in the chemicals sector, which - whilst it did increase its production volume by 4.5 percent - still only managed to increase sales by around 2 percent. In terms of investment (the entire amount invested accounted for DM 5.5 billion), companies concentrated on rationalisation measures and less on extending their production. Mechanical engineering had to be satisfied with a rate of growth of only 1 percent and falling net return from sales of around 2 percent. Textiles machinery and instruments engineering stagnated, while there was expansion in the construction machinery and IT branches.

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Annual Report 1978 (German)

In 1977, the situation in the world economy was still largely determined by the consequences of the severe recession of 1974/75. Analysts were still identifying weak investment, overcapacities after many years of euphoric growth and widespread uncertainty in dealing with the central questions of economic policy. Among the OECD states, gross national product rose by around 3.5 percent in real terms, with Japan (+6 percent) and the USA (+4.8 percent) out in the lead, with the figure for the EC area around 2.3 percent.

Even if one could hardly speak of an economic crisis in the Federal Republic, the German Federal Bank nevertheless described the general economic situation as "unsatisfactory" in its business report for 1977. Gross national product did not match the high rate of dynamic growth in the previous year, increasing by only 2.2 percent. In increasing by 2.5 percent, real overall industrial sales also made only modest progress. Furthermore, the processing industry had to come to grips with an inadequate degree of utilisation of its production plants (around 80 percent), with, in many cases, inadequate investment having been made in this area. Unemployment came to represent an ever more important factor in economic life: it had hardly fallen at all (1976: 1,060,300, 1977: 1,030,000) and, since the mid-1970s, had become more and more of a persistent social problem.

The chemicals industry was no longer achieving the outstanding results of the previous year, and, with production growth at a modest 0.5 percent, was far from reaching even the growth figure for industry as a whole. The individual segments of the chemicals sector displayed very variable development: in the production of organic raw materials, no growth was recorded, although the production of synthetic rubber, pharmaceuticals and fertilisers represented lucrative business. Conversely, profits in the production of chemical fibres were restricted by global overcapacities. Mechanical engineering also suffered a rather weak year. There was practically no change in net production (-0.1 percent), with exports coming under increased competitive pressure due to the increase in the value of the DM and higher ancillary wage costs, in international comparison, while the number of corporate collapses rose (193).

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Annual Report 1977 (German)

Numerous economic institutes regarded the global economy in 1976 as existing in a state of misleading calm. On the one hand, most of the economies which had been rocked by the crisis managed to overcome the resulting weak growth (globally, gross national product rose by 5.8 percent in real terms). On the other hand, however, it was not only the German Economic Research Institute in West Berlin that saw, in the level of unemployment (which had hardly fallen around the world) and the still rather low rate of capacity utilisation in production, good reason to speak of a "still unstable situation" in the industrialised countries of the West.

In the Federal Republic, this serious economic crisis was followed by a recovery phase which lasted around five years. In increasing by 5.6 percent in real terms, gross national product heralded the end of the recession, as did the sharp rise in exports of goods and services (+14 percent), re-intensified capital investments (+7 percent) and the increase in real overall sales for industry (+7.6 percent). In the industrial sector, the economy picked up as a result of the increase in investment, reduced warehouse stocks and the high level of demand from abroad, with the investment goods industry primarily benefiting from this, with sales up 12.6 percent. As one of the most successful sectors, the chemicals industry returned growth in sales of 16.1 percent. In an interview with the Handelsblatt business magazine in May 1977, BASF Chairman Matthias Seefelder attributed the success of the major chemical groups to the "inflationary expansion of business caused by changes in the price of oil", "chemical and technical ideas" and the "processes of corporate rounding-off in the 1960s". At the same time, Seefelder stressed that, since the mid-1970s, there had been "many advantages gained from innovation that had now been exhausted" and that, "more and more often, new products [were] no more than specialities or variations on a theme". Mechanical engineering had grounds to be more than satisfied, having generated overall sales up 11.9 percent. Here, machine tools and drive technology remained the most important segments for export business.

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Annual Report 1976 (German)

The winter of 1974/1975 saw the global economy bottoming out and remaining at this level until well into 1975. In real terms the gross national product of the OECD states fell by 2 percent, with industrial production stagnating across the world or remaining well below the values for the previous year. Of the OECD countries, the sharpest fall in gross national product occurred in Switzerland, Italy, Ireland and the Federal Republic. Only Norway, Japan and Sweden managed to achieve any real growth.

Contrary to the optimistic forecasts from numerous economic institutes, which had placed their trust in the power of the economic policy measures and a forthcoming increase in demand, "in the year of off-the-mark forecasts" the recession hit the Federal Republic with full force, according to the German Economic Research Institute in its weekly reports. Gross national product fell by 3.4 percent in real terms, industrial production fell overall by around 7 percent in the wake of massive collapses, especially in the first half of the year, and, at 4.8 percent, the unemployment rate soared to record highs that were scarcely believable. Overall sales for the industrial sector which provided employment for 6.5 percent fewer people than in the previous year, fell back nominally, too (-3 percent), for the first time since the somewhat milder recession of 1967. Production goods and raw materials industries were particularly affected by the grave crisis (-13 percent), while consumer goods, foodstuffs and luxury goods emerged comparatively unscathed. In the chemicals industry, sales fell back significantly, down 13.3 percent, and, in mechanical engineering, net production fell by 7.7 percent.

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Annual Report 1975 (German)

For the global economy in 1974 the "German Economic Research Institute" correctly identified "more serious unsolved problems than in the past". Unemployment, high rates of inflation, famine, energy shortages and a global economic downturn overlapped and set limits to global growth. The USA experienced its worst crisis since the 1930s, and Western Europe a far-reaching recession. Within the group of OECD states, gross national product fell by 0.3 percent in real terms. In the Federal Republic, the economic situation continued to deteriorate. While the increase in orders on the books of the processing industry still gave some hope of the oil crisis being overcome quickly, there were other indicators that pointed in a different direction: gross national product was close to stagnating at +0.4 percent, unemployment figures were up 2.6 percent, the rate of inflation rose to close to 7 percent, demand in the capital goods industry continued to fall, and net industrial production collapsed in almost all sectors. The economic crisis policy management of the Federal Government, which had adopted a special economic programme and increased investment, was initially unable to rein in the slump in the long term. However, the chemicals industry proved to be less susceptible to the crisis, increasing both its sales and net production (1973: DM 65.17 billion, 1974: DM 86.93 billion). In terms of sales, the large-scale BASF Group even found itself at the top of the list of the world's largest chemical companies. Mechanical engineering also displayed stable progress in the crisis. Overall sales increased from DM 69.17 billion in the previous year to DM 76.39 billion, with workforce numbers remaining almost constant (1973: 1,086,400, 1974: 1,089,200).

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Annual Report 1974 (German)

In 1973, it was not only the economy of West Germany but the entire structure of the world economy which was shaken to its roots. With the dollar exchange rates being unpegged in Germany, France and other European countries on 19 March ("block floating"), the system of fixed exchange rates collapsed. Military conflicts also imposed a burden on the global economy. After the outbreak of the Yom Kippur War, October saw the Arab states reducing their oil supplies and at the same time increasing the price of crude-oil-dependent energy sources (petrol for automobiles, heating oil, chemical raw materials).

Although the transition to "block floating" helped to buffer the consequences of the first "oil price shock" in the Federal Republic, and unlike the United States for example, West Germany was not directly affected by the supply boycott, but the years of a buoyant economy, full employment and cheap energy supplies were nearing their end, to be replaced by a period of "stagflation" (low rates of growth accompanied by increasing inflation) and rising unemployment. Crude oil "was the lifeblood of the Federal Republic as an industrialised nation" (Edgar Wolfrum), with Arab countries providing 75 percent of its requirement. In November, the Federal Government responded to the oil crisis with the Energy Security Act, the introduction of speed limits on motorways and trunk roads, an embargo on applications from foreign workers and a ban on driving on four Sundays in November and December. The far-reaching economic crisis found expression both in economic policy and in the mindset of society as a whole. From then on there was intensive public discussion "of the sense and folly of economic growth" (Knut Borchhardt).

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Annual Report 1973 (German)

Continuing inflation, disruption to the structure of the international currency system, the fear of a global energy crisis, but also the continued economic expansion of the industrialised countries of the West and global trade, which continued to flourish, all contributed to the shape of the world economy in 1972. In the OECD countries, gross national product increased by 5.6 percent in real terms (Japan: +9.2 percent, the USA: +6.4 percent). The Federal Republic also enjoyed its share of the accelerated trend in industrial production, recording a growth in production of 3.2 percent and achieving a nominal increase in its gross national product of 9.2 percent.

However, in the Federal Republic, the trend of the previous year turned ever more clearly into a structural problem in terms of economic policy. Gross national product increased in real terms by only 2.9 percent, clearly lagging behind the cost of living price index (+5.8 percent). In addition, the unemployment rate rose noticeably for the first time in three years (1971: 0.8 percent, 1972: 1.1 percent). The phenomenon of prices not falling during an economic downturn and unemployment and inflation appearing at the same time was an as-yet-unknown experience for economic experts and politicians alike. Finally, the latest challenges facing the general economy demonstrated that the hopes – nurtured since the early 1960s – that it would be possible to steer business and the economy globally by means of political instruments and keep them stable could not be realised in the long term.

The chemicals industry increased its overall sales from DM 53.57 billion (1970) to DM 56.74 billion, which left it, with an average growth rate of around 5.8 percent, trailing slightly behind the average figure for German industry as a whole. In comparison with chemicals companies and other European countries, German companies were also notable for their high levels of expenditure on research and development. Between 1962 and 1972, the proportion of overall sales this activity represented in the mineral oil industry was 0.8 to 1.2 percent and in the chemicals industry 3 to 5 percent (pharmaceuticals industry: 8 to 10 percent). With sales totalling DM 68.32 billion (+4.3 percent), mechanical engineering underlined its position as the leading sector of West Germany's industry. In terms of sales, office and IT technology (DM 5.8 billion), machine tools manufacture (5.71) and drive technology (4.21) were particularly significant.

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Annual Report 1972 (German)

A slower rate of economic growth in the industrialised countries of the West and a "global hike in costs and prices" were identified by the "Working Party of German Scientific Research Institutes" as providing the main stimuli for the development of the global economy: "On the whole, the increase in national product in the Western world was amplified in the winter half-year; however, this was only due to the rapid progress of the economic upswing in North America now underway. The global rises in costs and prices weakened only slightly. The uncertainty surrounding currency policy was alleviated somewhat, although, in the light of the lack of a solution to the dollar problem, the situation remained unstable. The economic upturn in western Europe continued through the 1971/72 winter half-year, even if not as pronouncedly as anticipated in the autumn of 1971". The broad brush strokes of the global trend were also reflected in the economy of West Germany. In real terms, gross national product rose by only 2.7 percent, while the rate of inflation of 5.4 percent was indeed above the rate of growth in the general economy. Furthermore, aspects of global currency policy had a direct effect on the Federal Republic. After the Federal Government had allowed the exchange rate of the DM to float in May 1971 and the dollar had been worth only DM 3.32 in the summer, in August the US government uncoupled the dollar from the gold standard. To avoid eroding the international currency system, a currency conference held in December hiked the value of the DM against the dollar (USD 1 = DM 3.2225).

The annual balance sheet for the chemicals industry, which achieved an increase in production of 6.7 percent, was summarised as follows by the magazine "Wirtschaft und Statistik" (Economics and Statistics) in early 1972: "Moderate increases in inorganic and organic base chemicals and their secondary products were offset by larger increases in the production of plastics, synthetic rubber, chemical fibres and consumer pharmaceuticals, body care products, light-duty detergents and dishwashing detergents. Due to the difficult conditions for exports, the production of synthetic ammonia for nitrogenous fertilisers continued to fall. There were also falls in the production of materials for plant protection and vermin control". In mechanical engineering, the production figure exceeded the corresponding figure for the previous year by 7.2 percent. However, after price adjustment, domestic orders were down 14 percent and those from abroad down 10.2 percent.

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Annual Report 1971 (German)

In the group of Western industrialised states, economic development was largely ambivalent. In the OECD countries, gross national product rose by 2.5 percent in real terms and throughout the EEC by 5.5 percent. In the industrialised countries of Europe, the highest rates of growth were achieved by Austria (+7 percent), France (+6 percent) and the Netherlands (also +6 percent), while the economies of Norway (+3.5 percent) and Great Britain (+2 percent) grew at a below-average rate. With growth in real terms of 11 percent, at a global level Japan cemented its leading position among the industrialised nations. Although, nominally speaking, the USA achieved its highest figure for gross national product in its history with DM 1010 billion, in real terms 1970s saw a minus figure of 0.4 percent being recorded.

The key economic ratios for the Federal Republic for 1970 were just below those for the previous year. Gross national product in real terms (+5.9 percent) and net employee wages (+8.7 percent) rose perceptibly once again, accompanied by a low rate of unemployment of 0.7 percent. The speed with which the 1967/68 crisis gave way to a boom can be seen from an overview of the years from 1967 to 1970: in 1970, real gross national product was up by almost 23 percent, capital investments by around 35 percent and private consumption by around 20 percent, compared with the equivalent figures from four years previously. However, as was the case in numerous other industrialised states, the pace of industrial development fell away somewhat. In West Germany, industrial production rose by 6.1 percent, a value slightly below the EEC average (6.6 percent). Falling production dictated the trend in the textiles and clothing industries; however, the electrical engineering industry, the automotive industry, the chemicals industry (+5.9 percent) and mechanical engineering all recorded strong growth.

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Annual Report 1970 (German)

In 1969, almost all industrialised nations enjoyed strong economic growth and low levels of unemployment, in some cases having to deal with a noticeable shortage of workers and rising nominal wage costs. While the rise in gross national product in real terms in the EEC failed to match the highest jump, that of the Japanese economy (+12.5 percent), at +7.1 percent it still achieved a more than respectable average value (France +8 percent, Belgium +6 percent, Italy and the Netherlands +5 percent). Within the group of industrialised countries, only the USA (+2.8 percent) and Great Britain (+1.2 percent) fell below the average growth figure.

In 1969, the Federal Republic recorded key economic ratios which came close to recalling the time of the "years of the Economic Miracle". Gross national product rose by a healthy 8.2 percent in real terms, with industrial production rising by 12.5 percent. Indeed, all branches of industry played their part in ensuring the robust health of the economy: the investment goods industry upped its production by 18.7 percent, the consumer goods industry by 11.4 percent and the foodstuffs and luxury goods industries by 4.6 percent. In the chemicals industry, production increased by 11.6 percent (with the production of chemical fibres and plastics in particular experiencing an upturn) and exports were up 13.3 percent. Mechanical engineering also presented successful figures. Overall, sales rose by 20 percent with exports up 12 percent. At the top of the exports ladder were machine tools, followed by textiles machinery and office machines. The factors responsible for this extremely healthy situation in the general economy were: modest wage agreements; the bankruptcy of numerous smaller and unprofitable operations (which at the same time offered existing companies new options for expansion and market opportunities); the healthy economy of important economic partners abroad; the positive concomitant effects of the legislation on stability and growth; and the national economic programmes in place.

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Annual Report 1969 (German)

Once again, the global economy was characterised by significant regional differences. A sound economy characterised the economic situation in Japan, Germany, France, Sweden and the Benelux countries as well, while the economy in the USA expanded in the first half of the year only then to fall away in the second six months. Nevertheless, most industrialised countries achieved respectable growth in production and productivity, with industrial production rising most strongly in Japan (+17.5 percent). The next rungs on the ladder were occupied by the Federal Republic (+11.7 percent), the Netherlands (10.9 percent), Italy (+6.3 percent), Belgium (+6.2 percent), Sweden (+5.4 percent) and Canada (+5 percent).

The Federal Republic did not take long to put the economic crisis of 1966/67 behind it, embarking on a path for growth which was to last for the next five years. Gross national product in real terms shot upwards, with growth of 6.6 percent after having recorded a negative figure the previous year (for the first time in its history), capital investments increased again by 12.1 percent (a value not achieved since 1955) and domestic demand picked up and filled industrial order books, with industry increasing overall sales by 14.5 percent. Corporate profits were 16.8 percent higher than in 1967 and private consumption also increased by 5.4 percent. Production output per employee rose by 15.2 percent in the chemicals industry, which increased its net sales slightly from DM 9.9 to DM 10.3 billion, and by 4.7 percent in mechanical engineering, which came close to stagnation in terms of net sales (1967: DM 10.7 billion; 1968: DM 10.4 billion).

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Annual Report 1968 (German)

In 1967, development of the global economy varied greatly in different regions. In the EEC, gross national product rose by 3 percent in real terms - an average value exceeded by the likes of Italy (with 5.9 percent), whilst Belgium, Luxembourg and, above all, the Federal Republic came nowhere near achieving this figure. After years of continued expansion in the general economy, a rather "mild recession" (Robert Hettlage) - assuming this interruption in growth is counted as a long-term trend in the West German economy - set the alarm bells ringing amongst economists and politicians of the day. The absence of economic growth (-0.1 percent), an unemployment figure of 2.1 percent, which in 1965 still stood at 0.7 percent, a rate of inflation of 3.5 percent, shrinking industrial production (overall sales down by 7.4 percent) and a slump in capital investment (down 8.4 percent) provided the first indications of the limitations to economic growth in the Federal Republic. The recession was particularly hard on construction, the automotive industry, the textiles industry and also mechanical engineering, which had to come to terms with a fall in production of 6.6 percent, although an increase in exports of 9 percent ensured that this sector occupied the leading position among the industrial exporting countries. On the other hand, the chemicals industry proved to be resistant to crisis, increasing its sales by 4.3 percent, although production capacities available to the major groups were not quite used to their full extent.

The general economic situation also represented a challenge for the "Grand Coalition" of Social Democrats and Christian Democrats, which turned to instruments of economic policy with its "Concerted Campaign", passing the Stability Act and adopting a "medium-term financial plan", as well as reforming the financial system. This bolstered the federal structure in terms of decision-making in fundamental economic policy.

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Annual Report 1967 (German)

Messer Griesheim had to handle the consequences of the merger and the necessary organisational adjustments within what was generally a difficult economic environment. In the economic history of West Germany, the two years 1966 and 1967 represent the end of the "long 1950s" (Werner Abelshauser), a boom period which had lasted from 1949 until 1966 without any economic setbacks. The special economic conditions of the post-war period had lost their stimulating effects for good: the potential workforce was exhausted and capital productivity had fallen away considerably.

Since the autumn, the Federal Republic had been undergoing its worst economic crisis, with this coming as a shock to the West German population, spoiled as it had been by the Economic Miracle. There was a noticeable slump in both private and public investment. With domestic demand for products in the mechanical engineering sector having been on the wane since as early as the spring of 1965, the spring of 1966 now also saw a decline in public civil engineering orders. In German industry, considerably more was being produced than was being sold. This overproduction and sales crisis resulted in gross national product growing by a mere 2.8 percent. Other consequences were inevitable: for one, the number of corporate bankruptcies increased from 2928 (1965) to 3301, with the unemployment rate in the second half-year also rising significantly. Unemployment figures shot up from 101,476 in July to 371,623 in December. 1966 represents a turning point for the longer-term economic structure as well, as the proportion of the workforce employed in the goods-producing sector was now no longer rising, and the existing trend was being superseded by the development of the service sector in the economy.

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Annual Report 1966 (German)

With the exception of some country-specific variations, the trend for further growth in economic capacity continued in the industrialised nations. The economy in the USA picked up and, in the second half of the year in particular, France and Italy staged an economic recovery, although in Britain the overall economic balance was adversely affected by economic stagnation and price rises.

Without achieving the strong rates of growth from the previous year, stable growth still persisted in the Federal Republic. At 5.3 percent, the increase in gross national product in real terms was clearly above the average of 3.7 percent for the EEC. Conversely, the increase in industrial production of 6.4 percent did not quite correspond to the average value throughout the EEC (+6.7 percent); however, it did slightly outperform industrial growth in the USA (+6.1 percent). In this year in which Adolf Messer GmbH merged with parts of Knapsack-Griesheim AG to form Messer Griesheim GmbH, the major German groups which had been created after the demerger of IG-Farben were once again amongst the leaders in the group of the world's largest chemicals companies. Leverkusen-based Bayer AG (sales 1965: DM 5.39 billion), Farbwerke Hoechst (DM 5.24 billion) and BASF (DM 4.05 billion) combined accounted for two fifths of all sales in the sector, with this figure rising by some 8.8 percent. In exports - where the main customers remained the EEC countries - industrial chemicals continued to dominate. In contrast with the previous year, mechanical engineering as the largest branch of industry was again forging ahead, increasing its production by around 10 percent.

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Annual Report 1965 (German)

In the non-Communist countries of Europe, gross national product rose across the board more strongly than in the previous year, reaching a growth figure of around 5 percent. Apart from in Italy, industrial production also continued to rise. The poor economic situations of both Italy and France were largely responsible for the slowdown in the average rate of growth in the EEC compared with the previous 12 months.

Within the EEC, the leading position was assumed by the Federal Republic which, once again, performed more strongly than in the previous year. At 6.5 percent, the rate of growth in gross national product for West Germany was matched by no other member state in 1964. In addition, the Federal Republic returned the lowest rise in prices and was the only EEC country to generate high export surpluses. In global trade, with exports up by 11.3 percent, West Germany cemented its second place behind the USA. Other notable features were the surge of around 8 percent in private consumption and the high level of capital investments, which increased by 14.3 percent. The second and fourth quarters in particular saw industrial production increase significantly. Overall sales in the chemicals industry rose by around 10 percent; however, it was not only the Federal Republic which experienced a distinct rise in the production of plastics. In terms of exports, which rose by around 14 percent, the leading position was occupied by industrial chemicals, ahead of plastics and pharmaceuticals. In mechanical engineering, production volume fell by 3.3 percent; however, the value of this did rise by 0.2 percent. With exports into the EEC gathering speed, overall exports in the sector rose by 6.6 percent.

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Annual Report 1964 (German)