• 26. August 2020
  • 08:40
  • Economy

First Signs of Economic Recovery in Eastern Germany

Stefan Kunze, Head of Port of Hamburg Representative Office in Dresden is responsible for the Eastern German market region, comprising all of the new federal states and Berlin. Here the economy is shaped especially by a highly developed chemical industry, as well as mechanical engineering and plant manufacture with a very long tradition, and numerous automotive production facilities. Add to this, agricul-tural and forestry products plus consumer goods. Export quotas of 24.3 percent (Thuringia) and 31.4 percent (Saxony) demonstrate the performance of Central Germany’s industry on world markets.
 
Owing to the corona pandemic, there was a decline in intra-European trade in particular. Supply chains were largely interrupted because of national and international factory closures. Especially the automotive industry was affected but with production picking up again since May, a recovery in this sector is expected. However, this industry is currently undergoing a switch to electric powertrains, which will lead to structural changes. The VW plant in Zwickau, for example, has been converted into one of the most efficient electric car factories in Europe, and the first ID.3 vehicles have already rolled off the production line.
Another difficult factor to assess is the impact of the pandemic on the shipyard industry of the Baltic Sea coast, which has been focusing on building high-quality cruise ships in recent years.    
 
Economic surveys in the region show a more optimistic outlook for the second half of the year, after previous results showed a strongly pessimistic attitude. This is also reflected in the development of cargo throughput of hinterland terminals. Recovery has been evident here since June and some terminals have already matched the previous year’s figures. Nevertheless, the overall situation is considered difficult to assess. Fortunately, all terminals and logistics service providers in the Eastern Germany region were able to adjust very quickly to the restrictions imposed by COVID-19 and ensure smooth operation.
 
Nonetheless, it is unlikely that the market slump of up to 40 percent in March/April can still be compensated in the course of 2020. Full economic recovery is expected for 2021, provided there is no second wave of coronavirus infections. In that case, the impact would be even more severe. 
 

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