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Diana Buss

Corporate Communications

Senior Vice President Communications

+49 2151 7811-251

+49 2151 7811-598


The year 1999

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.

Annual report 1999
PDF (2.8MB)

The year 1998

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.

Annual report 1998 (only available in German)
PDF (3.5MB)
Financial statement 1998 (only available in German)
PDF (1.1MB)

The year 1997

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.

Annual report 1997 (only available in German)

The year 1996

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.

Annual report 1996 (only available in German)
PDF (957k)

The year 1995

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.

Annual report 1995 (only available in German)
PDF (7.4MB)

The year 1994

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.

Annual report 1994 (only available in German)

The year 1993

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.

Annual report 1993 (only available in English)
PDF (937k)

The year 1992

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.

Annual report 1992 (only available in German)
PDF (2.4MB)

The year 1991

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).

Annual report 1991 (only available in German)
PDF (2.7MB)

The year 1990

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.

Annual report 1990 (only available in German)
PDF (2.7MB)