The export climate, as based on an assessment of the current business situation plus prospects for the next six months, is characterised by strong declines. Due to this the mood barometer is down 41 percentage points. Companies are convinced that the pandemic will continue to adversely impact exports over the next six months. More than 36% of the exporters surveyed expect sales to fall, whereas only 20% are reckoning with a rise.
Beer, meat and dairy industry worst hit by coronavirus
This negative trend is reflected to varying degrees in all sub-sectors of the food industry. The worst outlooks have been perceived in the beer sector, with a deterioration of 57 percentage points in international markets, in the meat processing sector by with a decline of 36 percentage points and in meat and sausage products with a by 23 percentage points. A 19 percentag epoint decline has also been recored for dairy products. By contrast, the baking industry (+36 percentage points) and fruit and vegetable processing (+ 15 percentage points) provided much more positive assessments of their business outlooks.
International business prospects are equaly depressing for the next six months. This is mainly because export managers are unable to fully assess the consequences of the coronavirus crisis in economic terms. In particular the confectionery industry has rated business prospects 20 percentage points lower and the brewery industry 18 percentage points lower. Manufacturers are clearly reckoning with restricted travel in the holiday season. Edible oil (+23 percentage points) and non-alcoholic beverage businesses (+21), however, expect improved prospects. This perception is driven by the anticipated uptick in light food, vegetable and soft drink consumption in summer.
Export climate sees Russia and US losing out
Another parameter, the export climate index, declined by 42 percentage points across all sectors. Declines are particularly marked in the beer (-39 percentage points), meat (-17 percentage points) and cold meat (-15 percentage points) and confectionery (-14 percentage points) sectors. However, the greates slump in the export climate is perceived in the dairy products sector, where the index deteriorated by 58 percentage points. Sectors with a high export share of their products in Asia and Southern Europe are highly pessimistic with regard to the first half of the current year. By contrast, mainly positive sentiments have been perceived in the baking and non-alcoholic beverage industries, with ratings rising by 20 and 17 percentage points respectively.
More than 78% of the total exports of the German food industry are destined for the EU single market. While the highest sales volumes are expected in the Netherlands and in Poland, the lowest are perceived in Italy and in France. German exports have experienced severe setbacks in Italy, where strict measures to contain the pandemic were introduced at an early stage in February. Germany is the third largest food exporter in the world. The above-mentioned industries are expecting exports to deteriorate by 9 percentage points on last year. China, Ukraine and Vietnam and Switzerland are expected to remain the most important. Sales volumes are, however, expected to decline in Russia and in the US.