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“As a global export industry we view the order prospects on the world market with concern because public investments in rail projects are partly reduced, postponed or put on hold,” says VDB CEO, Dr Ben Möbius. “We have to expect a two-part situation in 2021: markets in Europe will continue to be stable, but a clear, prolonged slowdown in exports.”
A recent survey of VDB members found that 77% expected exports and foreign orders, which comprise half of the German rail industry’s turnover, to drop slightly or strongly until March 2021 compared with the same period in 2019-20. Around 57% of respondents stated they were already facing a tighter export market, and 28% had seen a drop in overseas orders. 27% of respondents did not expect this to recover until the second half of 2021, while another 20% did not foresee a recovery until 2022.
“Coronavirus-related travel restrictions, along with logistics and supply chains disruptions, have naturally led to export slumps,” Möbius says. “However, the export survey points above all to medium-term economic effects, which we take very seriously.”
VDB says travel restrictions put in place to limit the spread of coronavirus must be designed in a way to limit their economic impact. It favours allowing some travel alongside effective testing capability, with a strategy coordinated across the European Union’s internal market.
“Export orders are closely linked to local advice and tailor-made technical solutions,” Möbius says. “Travel restrictions are undoubtedly a key instrument for pandemic containment. But an effective crisis policy must combine a very high level of protection with the least possible economic impact.”
The association is calling for a national investment policy that strengthens climate-friendly industries to support a climate-friendly economic recovery, including the implementation of sustainable technologies. While the German government’s economic stimulus package and supplementary budget will give a boost to climate-neutral growth in the domestic market, VDB says there must also be a focus on rebuilding exports with targeted basic investments in digitalisation and alternative traction.
A change in public procurement strategies to favour climate-friendly developments that provide value for money is also needed, VDB says.
The post VDB – outlook for German rail industry exports bleak appeared first on International Railway Journal.
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