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German Economy Back on Track with Digital and Electronics Sectors Set to Boom

Germany’s economy is set to return to pre-pandemic levels this year, with the electronics and ICT industries forecasting above average growth in 2022.

Digital and electronics sectors forecast above average growth for year

Germany’s digital and electronics industries are set to enjoy continued growth in 2022 according to forecasts issued by the digital association bitkom and the German Digital and Electro Industry Association (ZVEI). IT spending is forecast by bitkom to rise by almost six percent in the year ahead, with ZVEI assuming a production increase of four percent in 2022. This represents growth above the 3.6 percent forecast by the Federal Ministry of Economic Affairs and Climate Change (BMWK) in its recently published Annual Economic Report 2022. The government expects price-adjusted GDP to enjoy an annual year-on-year increase of 3.6 percent.

Economic output is back to pre-crisis levels for the first time since the coronavirus pandemic begun.

IT spending to grow by almost six percent

Information technology spending is forecast to grow by 5.9 percent in the year ahead according to digital association bitkom, taking revenue to EUR 184.9 billion in 2022. Software spending is expected to record the greatest growth in the segment, climbing nine percent to EUR 32.4 billion. IT services will account for the largest share of the IT market in the year ahead, with turnover of EUR 43 billion (+3.9 percent) forecast. Spending on IT hardware is forecast to grow by 5.7 percent to EUR 33.2 billion in the current year.

Electronics sector to continue growth path of 2021

Turnover in Germany’s electronics sector almost reached the EUR 200 billion mark in 2021 according to ZVEI. Supply bottlenecks caused by the global Covid-19 pandemic failed to halt growth in the sector, with production up by nine percent for the period January to November 2021. Nominal revenues also increased by almost 10 percent during the same period. The industry association is now forecasting a production increase of four percent in 2022.

Coalition government manifesto strengthening digital and electronics growth

German Digital and Electro Industry Association Chairman of the Executive Board, Wolfgang Weber, believes that the new German coalition government agreement to promote digitalization is helping strengthen the sector’s position. Digitalization plays an important part of the new government’s climate targets, with Weber urging for an upgrading and expansion of the power grid synchronized with renewable energy expansion.

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