German Economic Slowdown Has Little Impact On Slovenia

By , 13 Apr 2019, 17:57 PM Business
German Economic Slowdown Has Little Impact On Slovenia Montage: JL Flanner

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STA, 13 April 2019 - The downturn in Germany's economy has not yet had a significant effect on Slovenia's economy, although automotive suppliers exporting to Germany have started to see a slight drop in orders.

 

Gertrud Rantzen, the president of the Slovenian-German Chamber of Commerce, has told the STA in Bled this week that there are several reasons for the slowing of Germany's economy, among them uncertainty caused by Brexit and the intention of the US to raise tariffs on imports.

She said that the signs of slowing are most evident in manufacturing industry, as this sector sees a decline in investment funds in times of uncertainty.

Rantzen does not believe that Germany faces a crisis as severe as the one decade ago, but she does not exclude the possibility. She believes much will depend on Brexit and the relations between Europe and the US.

The automotive industry, which has started to feel the effects of the downturn, is well prepared for such fluctuations in economic trends, said Rantzen.

She believes that most countries are following economic indices closely and are well-prepared, so it is not likely that crisis as severe would repeat.

Marko Gorjup, the boss of the Novo Mesto-based TPV group, an automotive supplier, told the STA at the sidelines of an exporters' conference in Brdo pri Kranju this week that there had been a slight decrease in orders in autumn.

The decrease is "nothing drastic" and the company is optimistic that the situation will stabilise in the second half of the year, he said.

The economic slowdown has not yet been felt in construction, Igor Kastelic, the director of Rem Trebnje, a module building maker, told the STA at the conference.

"In the first quarter, our revenue was about 15% higher than last year, with Germany accounting for the majority of our sales," said Kastelic, implying that the company was barely keeping up with orders.

Moreover, Marko Lukić, the boss of Lumar, a maker of prefabricated houses, said in mid-March at an event hosted by PwC and KD Skladi that the company's production lines were booked for the next year and a half.

He noted however that the construction sector would be the last to feel a potential economic crisis due to its long investment cycles.

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