Monday, January 4th, 2021
Upswing after Corona low
Study: Hospitality Industry Will Grow Vigorously
The hospitality and cultural industries in particular suffer from the corona crisis. However, both industries can hope for an early recovery. According to a study, they will benefit particularly strongly from the expected economic upturn. But things are not looking up for all sectors.
Strong growth in the hospitality and auto industry, declines in mining: According to the Prognos Institute, not all industries will benefit from the expected economic upturn after the Corona crisis. “The gap between the weakest and the strongest industry development is greater than ever before,” said Prognos’ chief economist Michael Böhmer.
The experts believe that the strongest growth this year will be in industries that have been hit particularly hard by the Corona crisis. Mining, coking and mineral oil processing, on the other hand, are likely to continue to shrink due to the significant structural change in these sectors.
The hospitality industry, which suffered intermittent closures during the pandemic, could increase its economic output by 28 percent this year, according to the study. For the cultural and creative industries, too, which had to struggle with similar restrictions in 2020, Prognos expects clear double-digit growth rates. The prerequisite is that the restrictions are noticeably and permanently eased by spring at the latest and that the industries are spared from a wave of bankruptcies.
Auto industry among the winners
The experts also count the auto industry, which is likely to benefit from the global economic recovery, to be among the growth winners with an expected increase of around 15 percent. However, this could only compensate for less than half of the slump from the crisis year 2020.
In industrial sectors such as mechanical engineering, the textile industry or the metal industry, Prognos predicts exceptionally strong growth rates of 4 to 7 percent. The increasing demand from abroad will benefit export-oriented branches of the economy. At the same time, the demand for capital goods from these industries will rise again in Germany.
According to forecasts, manufacturers of consumer goods will benefit from increasing consumer mood. Economic and labor market policy measures had largely stabilized private household incomes during the crisis.
The upswing doesn’t just depend on the industry
Prognos sees solid development in the chemicals and pharmaceuticals sector as well as in most of the service sectors. Growth rates in the “normal” range of 1 to 3 percent are expected. The information and communication service sector is benefiting from the digitization trend. Prognos also expects solid growth for traffic and logistics.
Air traffic, which has been hit hard by travel restrictions, is predicted to see a strong plus of around 10 percent. However, this will only make up part of the historical slump from the crisis year.
Prognos anticipates a dynamic economic upturn in Germany from spring onwards and an increase in gross domestic product of 3.9 percent for the year as a whole. The economic research and consultancy firm expects that around two thirds of the macroeconomic losses of the crisis can be made good.
Whether and how much a company will benefit from the upswing does not only depend on the industry. “Every company has its own economic situation and needs its own analysis,” explained Böhmer. For a mechanical engineering company with a focus on the Chinese market, business should have stabilized in the course of 2020. A competitor who mainly delivers to European countries, on the other hand, is likely to experience subdued sales growth into the first half of 2021.