Always good to have broad economic indicators before launching new insurance products;
These new reports are published as part of Atradius’ extensive suite of insights for businesses trading internationally to mitigate risk and seize new opportunities.
Highlights from the reports:
Germany’s economic rebound in H2 2020 did not persist into 2021 with GDP contracting 1.8% quarter-on-quarter in Q1, driven by the pandemic and subsequent hit to private consumption. However, exports have benefited from global rebound, particularly from China, with German exports to the Chinese market increasing nearly 38% in March. Overall, exports are forecast to grow 9% in 2021. Atradius reports expectations for Germany’s economic activity to return to its pre-pandemic level in late 2021, with growth forecasts of 3.5% this year and 4.5% in 2022, following a 5.1% contraction in 2020. The key drivers of German economic recovery are manufacturing and construction, forecast to grow 8.2% and 3.3% respectively.
In the first quarter, GDP in Italy contracted 0.4% quarter-on-quarter. However, Atradius reports Italy’s economic activity is expected to accelerate from Q2 onwards due to the ongoing vaccination rollout and easing of restrictions. After a steep contraction of 8.9% in 2020, Italian GDP is forecast to rebound 4.6% in 2021 with both investments and exports expected to see growth above 10%. However, the rebound in private consumption will remain modest due to reduced household incomes. Due to the improved economic outlook, the credit risk and business performance outlook of some Italian major industries has been recently upgraded, albeit from a very low level in most cases.
Atradius reports French GDP contracted in Q1 2021 but only by 0.1% quarter-on-quarter with economic activity sustained by a modest rebound in investment spending and private consumption. Atradius warns the growth rate in Q2 will be affected by comprehensive lockdown measures but a rebound is expected with a forecast 5.4% growth in GDP in 2021, following a contraction of 8.2% in 2020, driven by domestic demand. Household consumption and investment will increase this year with business investments benefiting from ongoing large stimulus measures. Meanwhile, exports are forecast to rebound 11% this year.
Damien Dawson, Regional Manager for Atradius’ Southern Hub, commented: “Europe has long been an established and important trading partner for the UK. However, like many trade relationships across the globe, the pandemic has disrupted what was business as usual. Add to this the compound effect of Brexit, and businesses are now trading in a very new and uncertain trading environment than they once were.
“Information has long been the bedrock to sound trade but with a backdrop of change, uncertainty and new risks, it is more important than ever. Comprehensive insights into the market you’re trading with and on individual buyers is absolutely essential. Crucially, these insights must be updated in real time as risks can change almost overnight, making them even more acute. A robust trading strategy now relies on being armed with accurate and up-to-date information combined with the ability to respond quickly and flexibly to new risks. If you don’t have the resource you need, go out and get it. A trade credit insurer can help you develop the right trade strategy to mitigate risk and seize growth, with the buffer of non-payment protection should the worst happen.”
For more information and a suite of free economic, payment and country reports, visit the publications pages of the Atradius website https://atradius.co.uk. You can also follow @AtradiusUK on Twitter and AtradiusUK on LinkedIn.