3.1 General business environment

The year under review saw a further recovery in the macroeconomic environment. Global gross domestic product (GDP) grew by a further 2.7 per cent following the 4.1 per cent growth achieved in 2010. Emerging markets continued to be the key growth drivers and stabilising factors in the global economy. By contrast, growth in the industrialised nations was subdued. During the course of the year, various uncertainties in international markets resulted in a slowdown in the economic upturn overall. This represented a normal cyclical pattern following the strong growth in the previous year, although there were also other temporary contributory factors, such as the sovereign debt problems in the euro zone and in the USA, the earthquake in Japan, and the sharp increase in commodity prices. In view of the sovereign debt issues, and given the slackening pace of economic growth, most industrialised countries had already switched to the pursuit of policies focusing on savings and retrenchment, with expansionary monetary policies providing further stabilisation. In 2011, significant momentum in favour of capital expenditure in the private sector also cushioned the impact from a generally weak increase in output.

Gross Domestic Product 2011
Real change compared with the previous year

Source: Eurostat, National statistics, World Bank (Status 07.03.2012)

The impetus behind the global economy's emergence from the crisis over the last two years eased off markedly during the course of the year under review. By the end of the year, financial market data and sentiment in the economy were pointing to a significant economic slowdown. In contrast, real economic data remained overwhelmingly positive until recently. According to an assessment by the International Monetary Fund, the global economic situation will continue to be fragile in 2012, the result of flagging growth in the real economy in all regions and uncertainty regarding the funding position in public finances and financial institutions.

After starting the year strongly, the European economy cooled off noticeably during the course of 2011. Overall, GDP in the European Union grew by 1.6 per cent, although growth rates varied considerably from country to country, as in 2010. Germany continued to be the engine of the European economy, achieving robust growth of around 3.0 per cent for the year, during the course of which it exceeded pre-crisis levels. Economic performance was also fairly dynamic in countries such as Poland and Sweden, where growth rates of 4.0 per cent were achieved. In contrast, two of the largest economies, Spain and Italy, remained static. Growth in Greece and Portugal continued to weaken as a consequence of comprehensive austerity measures. In 2011, the uncertainty arising in connection with sovereign debt issues had a noticeable impact on the core countries of the euro zone for the first time, ultimately highlighting the extent to which European economies are interlinked.

A whole range of negotiations, rescue packages and austerity programmes were unable to restore investor confidence or stimulate the growth sorely needed by individual countries. In mid-2011, the sovereign debt crisis finally hit the Italian economy, which came under intense pressure. As a consequence, sentiment in both industry and on global capital markets disintegrated. However, general economic momentum was also hampered by retrenchment programmes and the tough labour market conditions that continued to prevail in many countries. There was an appreciable corresponding fall in government and consumer spending, as well as in domestic demand, particularly in the second half of the year.

As in the case of GDP growth, the labour market situation also varied from country to country. Germany recorded its lowest unemployment rate for years at 5.9 per cent; there were also sharp drops in the unemployment rates in Belgium and Sweden. However, many other euro zone countries saw unemployment rise: it increased threefold in Ireland in the course of the crisis; in Greece, the rate also climbed significantly to the current level of 21 per cent. The situation was particularly precarious in Spain, where the unemployment rate rose to nearly 22 per cent in 2011, yet another indicator of the structural problems in the country.

Economic growth in the USA was inconsistent over the course of 2011: after a weak start to the year, growth in the second half of the year was stronger and also higher than that in other industrialised nations. The primary growth driver in the US economy was strong domestic demand but the economic climate in the USA continued to be impacted by structural problems in terms of government debt, the real-estate market and unemployment. The argument between policymakers regarding government debt had a negative impact on investment in inventories, particularly at the start of the year. In contrast to the approach in 2010, companies therefore held back from further increases in inventories. On the other hand, capital spending on equipment continued to hold up well with growth of approximately 10 per cent. Overall year-on-year GDP growth was 1.7 per cent.