The year 1989

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.

Annual report 1989 (only available in German)
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The year 1988

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.

Annual report 1988 (only available in German)
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The year 1987

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.

Annual report 1987 (only available in German)
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The year 1986

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.

Annual report 1986 (only available in German)
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The year 1985

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.

Annual report 1985 (only available in German)
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The year 1984

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.

Annual report 1984 (only available in English)
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The year 1983

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.

Annual report 1983 (only available in English)
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The year 1982

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.

Annual report 1982 (only available in German)
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The year 1981

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).

Annual report 1981 (only available in German)
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The year 1980

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).

Annual report 1980 (only available in German)
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