German Firms See Growing Pessimism Abroad as Iran War Disrupts Supply Chains
Impact of Iran War on German Firms and Global Supply Chains
BERLIN, May 5 (Reuters) - German firms operating abroad have become more pessimistic about their prospects, with nearly one in three expecting economic conditions to worsen as the Iran war exposes vulnerabilities in global supply chains, a survey showed on Tuesday.
Survey Findings on Business Outlook
The survey from the German Chambers of Industry and Commerce, or DIHK, of 4,500 companies showed 32% expected the situation at their international locations to deteriorate in the next 12 months.
Comparison with Previous Outlook
That marks an increase of 8 percentage points from the previous AHK World Business Outlook survey conducted before U.S.-Israeli airstrikes on Iran at the end of February unleashed a Middle Eastern conflict.
Effects on Supply Chains and Energy Markets
The resulting disruption of energy markets and supply chains, surging fuel costs and volatile demand are weighing on international business activity, the survey found.
Expert Commentary
"This is more than just a slowdown in the economy. Uncertainty is becoming the determining factor," Volker Treier, DIHK's head of foreign trade, said.
Current Business Conditions
Despite the darker outlook, assessments of current conditions have not yet worsened overall: Nearly 40% of respondents rated their situation as good and almost 50% as satisfactory.
Regional Variations in Impact
Dependence on Oil and Gas Imports
For German firms with international locations, the impact of their dependence on oil and gas imports from the Gulf region varies depending on geography, the survey's authors said.
Asia-Pacific and Conflict Zone Proximity
Companies closest to the conflict zone and those in the Asia-Pacific region, excluding China, are broadly sceptical about the months ahead.
Optimism in Other Regions
Firms operating in China, the United States and South America's Mercosur bloc remain comparatively optimistic.
(Reporting by Christian Kraemer and Miranda Murray; editing by Barbara Lewis)
