1. Berlin 09-10-02Dr. Michael Stahl Michael Stahl Head of Economic Department GESAMTMETALL the employers’ association of the German metal and electrical industry The current economic Situation of the German metal and electrical industry

2. Berlin 09-10-02Dr. Michael Stahl 2 Branches of the M+E Industry Automotive industry Mechanical engineering Electrical engineering Fabricated metal goods industry Foundries Communication equipment Medical, precision and optical instruments Steel working, steel rolling Non-ferrous metalworking industries Steel and light metal construction Shipbuilding and marine engineering Drawing and cold rolling mills Aerospace equipment, manufacturing and repair

3. Berlin 09-10-02Dr. Michael Stahl 3 Members & Employees  The M+E Industry in Germany comprises 23.000 companies, of which 15.000 are industrial companies with 3,5 million employees.  Gesamtmetall represents 19 member associations with 6.100 companies and over 2 million employees.  4.200 companies are covered by collective agreements (with 1.8 million employees). The other 1.900 companies are so called „OT“ members (with 223.000 employees).

4. Berlin 09-10-02Dr. Michael Stahl 4 Total 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 July Incoming orders (by origin) Upwards again Index value 2005 = 100, quarterly figures, seasonally adjusted and adjusted for price July 2009 compared to July 2008 Abroad: -27,8 % Domestic: -13,9 % Total: -21,5 % Domestic Abroad Source: Federal Statistical Office.

5. Berlin 09-10-02Dr. Michael Stahl 5 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Bottom of the crisis July 2009 compared to July 2008 Fabricated Metal Goods:- 28,5% Electrical Engineering:- 16,6% Mechanical Engineering:- 40,7% Automotive Industry:- 8,1% 1.Q. July/June 2009 compared to April/May 2009 seasonally adjusted Fabricated Metal Goods:+2,4% Electrical Engineering:+5,2% Mechanical Engineering:+9,2% Automotive Industry:+11,3% April/May June/July Incoming orders by branches Mechanical Engineering Fabricated Metal Goods Electrical Engineering Automotive Industry Index value 2005 = 100, quarterly figures, seasonally adjusted and adjusted for price Source: Federal Statistical Office.

6. Berlin 09-10-02Dr. Michael Stahl 6 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Still on the bottom July July 2009 compared to July 2008 -25.7 percent Production Quarterly figures, seasonally adjusted Index value 2005 = 100 Source: Federal Statistical Office.

7. Berlin 09-10-02Dr. Michael Stahl 7 Production by branches 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Fall stopped Fabricated Metal Goods:-33,5% Electrical Engineering:-24,8% Mechanical Engineering:-31,5% Automotive Industry:-21,5% July 2009 compared to July 2008 1.Vj. June/July April/May Source: Federal Statistical Office. Mechanical Engineering Fabricated Metal Goods Electrical Engineering Automotive Industry Quarterly figures, seasonally adjusted Index value 2005 = 100

8. Berlin 09-10-02Dr. Michael Stahl 8 Jan. 76,2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 July 69,3 Normal use of capacity Source: ifo Business Survey. Average degree of capacity utilisation in percent of their full use of capacity As low as never before Capacity Utilisation

9. Berlin 09-10-02Dr. Michael Stahl 9 July 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3.474 Increase in Employment from April 2006 to September 2008: +242.000 Reduction July 2009 compared to July 2008 -4.4 percent Reduction since October 2008: -154.000 Employment Seasonally adjusted Measured in thousands of employees Sources: Federal Statistical Office, Gesamtmetall Calculations; *2009 prelimenary figures.

10. Berlin 09-10-02Dr. Michael Stahl 10 2005 The gap opened again 2006 vacant positions* (reported and not reported) 2007 August 20082009 Seasonally adjusted Measured in thousands of people Unemployed People *) according to FAL researches every second vacant position isn‘t reported to FEA Sources: Federal Employment Agency (FEA), Gesamtmetall calculations. Labour Market of M+E Occupations

11. Berlin 09-10-02Dr. Michael Stahl 11 Job security Incoming Orders Employees 2. Q. July Aug. Sep. Oct. Nov. Dec. Jan. Feb. March Apr. May June Expected employment at a normal level of productivity Companies stick to permanent staff Production seasonally adjusted Index value 2. Quarter 2008 = 100 Sources: Federal Statistical Office, Gesamtmetall Calculations.

12. Berlin 09-10-02Dr. Michael Stahl 12 Short-time work in the M+E Industry Sources: Federal Statistical Office thousand 20082009 480.224 121.200 71.200 363.873 225.263 288.200 648.700 726.200 142.799 82.045 73.539 967.200 974.500 896.400 40.721 Short-time work is exploding – Wave of announcements ebbs away Number of people covered by announcements Number of Short-time worker

13. Berlin 09-10-02Dr. Michael Stahl 13 Full time work net pay SC 100 % Short-time work net pay SC 100 % Short-time work + further training net pay SC SC = Contributions to Social Security Insurance Employer Employee 0 € What does the employer have to pay? only up to 7th month

14. Berlin 09-10-02Dr. Michael Stahl 14 Example: 50 % Short-time work Short-time work with 50 % reduction of working time net pay Employer Federal Employment Agency net pay cancelled net pay STWA 67 % Employees pay STWA = Short-time working allowance ES* Employer subsidy by CA (*not in all regions)

15. Berlin 09-10-02Dr. Michael Stahl 15 2007 2008 2009 Source: Federal Statistical Office. Job security Declining productivity – rising costs Production per hour Unit labour cost Annual percentage change

16. Berlin 09-10-02Dr. Michael Stahl 16 Sep. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Bottom of the crisis May Business Situation Source: ifo Business Survey. The balance values of the current business situation are the differences of the percentages of the responses “good” and “poor” Assessment of the present state of business Balance values, seasonally adjusted

17. Berlin 09-10-02Dr. Michael Stahl 17 Sep. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Positive again Business Expectations The balance values of the expectations are the differences of the percentages of the responses “more favourable” and “more unfavourable” Business outlook for the coming half-year Balance values, seasonally adjusted Source: ifo Business Survey.

18. Berlin 09-10-02Dr. Michael Stahl 18 Obviously less Sceptical Jan. Feb. Mrz. Apr. Mai Jun. Jul. Aug. Sep. Okt. Nov. Dez. Jan. Feb. Mrz. Apr. Mai Jun. Expected Development of Exports for the next 3 Months 2008 2009 Business Expectations Source: ifo Business Survey The balance values of the expectations are the differences of the percentages of the responses “expected to rise” and “expected to decline” Expected Development of Production for the next 3 Months Balance values

19. Berlin 09-10-02Dr. Michael Stahl 19 Further Layoffs in Sight Jan. Feb. Mrz. Apr. Mai Jun. Jul. Aug. Sep. Okt. Nov. Dez. Jan. Feb. Mrz. Apr. Mai Jun. 2008 2009 Balance values The balance values of the expectations are the differences of the percentages of the responses “expected to rise” and “expected to decline” Expected Development of Employment for the next 3 Months Source: ifo Business Survey Business Expectations

20. Berlin 09-10-02Dr. Michael Stahl 20 Consumer Prices Close to Stability annual percentage change Sources: Federal Statistical Office, Consensus Forecasts, September 2009 quarterly figures 2008 2009 forecasts July -0,5 Aug. 0,0 2010

21. Berlin 09-10-02Dr. Michael Stahl 21 Forecasts 2010 200820092010 GDP1,3-4 1/21 1/2 productivity0,0-2 1/23 consumer spending0,41/2-1/2 public spending2,12 1/22 investment3,3-221/2 export2,9-155 import4,39 1/23 consumer prices2,601 Out of the Crises? annual percentage changes source: IW Köln, 21.9.2009