Market profile

Germany is the UK’s second largest global market and its
largest European export market.

The UK is Germany’s fifth largest supplier after Italy, France, The Netherlands and the US, with a market share of around 6.3%. In 2005, British exports of goods and services to Germany were worth £30.8bn and almost 1,000 British companies have subsidiaries in the country.

What are the opportunities? 
Germany is a sophisticated, mature and highly competitive market. The population has a high standard of living, with a GDP per capita among the highest in the EU. British companies sell a huge range of products and services to the country and there are opportunities in most sectors. Particular export successes include:

• Vehicles/ components
• Petroleum and gas
• Healthcare
• Aerospace
• Chemicals
• Creative industries

The Germany economy is more heavily based upon industry than some of its EU partners, although the services sector is highly developed. The German economic system is described as a social market economy. Germany’s economy accounts for 30% of the output of the euro-zone. The reunification process revealed a gulf between western and eastern Germany.

There is a stark divide between the strong, technologically advanced and highly competitive western Germany and the less developed former communist economy of the east, which is in the throes of free market restructuring and continues to suffer simultaneously from high structural unemployment and skills shortages. Unemployment remains high, particularly in the east. Much of this is accounted for by the restructuring of German industry, which is gradually shrinking toward similar levels of contribution to GDP as industrial sectors in other EU states.

Germany is the largest economy in Europe. Over the last few years, its performance has not been dynamic because of the country’s vulnerability to outside shocks, domestic structural problems and permanent difficulties integrating the eastern part, which used to be communist. Besides, the country has been touched in the international financial crisis of 2008, and should not recover before at least 2010.

The coalition government is expected to put through several reforms on social charges and medical care, in order to redress public finances. Unemployment is increasing, and the trend is not likely to reverse. The German agricultural sector contributes about 1% to GDP and employs about 2.5% of the active population. The sector has greatly benefited from State subsidies.

Main agricultural products are milk, pork and livestock breeding, sugar beet and cereals. Consumers show a preference for organic agriculture. The country is going through a process of de-industrialisation; the contribution of the industrial sector to GDP has therefore dropped from 51% in 1970 to 29% today.

However, the German economy still has some specialised sectors such as mechanical engineering, electric and electronic equipment, automobiles and chemical products. Its automobile industry is one of the country’s largest industrial sectors, and it is the 3rd largest exporter of cars in the world. The tertiary sector contributes to about 70% to GDP. The German economic model rests especially on a dense network of SME’s; there are more than 3 million of them and they employ 70% of salaried workers.

 

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