According to the latest edition of the EY Global Capital Confidence Barometer, 96% of German executives see the local economy as improving. We find this level of positive sentiment striking given the strategic and disruptive pressures so many German companies face — adaptation, digitization, automation, saturated markets and talent shortages, to name a few.
These pressures are here to stay and they’re pushing many sectors into crises unlike anything they’ve seen in the past. Usually, these types of pressures would result in a decline in business volume. So far, this hasn’t been the case, largely because financing remains affordable and there is still easy access to capital. We surmise that because volumes haven’t dropped, many companies still believe they are on solid footing. In fact, 82% say they are expecting revenue growth rates of between 6% and 15% in the coming year.
Money may be cheap for a while, but companies unwilling to reshape their organizations now may soon find themselves on the road to obsolescence.