The headlines in the first week of 2021 are all over the place: “We’re not catching up, we’re falling behind”. “Industries that are winning, industries that are losing”. The lockdown has been extended through the end of January, with calls for an indefinite lockdown looming. The virologist Christian Drosten expects a “very complicated” first half of the year, SPD health politician Karl Lauterbach speaks of the fact that we have “the worst three months” (source: FAZ.net) of the pandemic ahead of us. The HDE warns of up to 50,000 insolvencies in the retail sector unless economic support is provided by the state (source: Einzelhandel.de). On the other hand, the DAX recorded an all-time high of over 14,000 points this week (source: Handelsblatt.com). The new vaccine approvals promise hope, even if the start of vaccination in Germany has been rather slow so far.
Around half a year ago, we surveyed entrepreneurs and the board and management level on their assessment of the situation at that time and their forecast for the months and years that followed. At that time, they were already anticipating far-reaching economic restrictions until at least 2021,as you can read in our report, along with other findings and analyses. And that’s exactly how it turned out.
GDP in Germany slumped by 5.6 percent in 2020 compared with the previous year. For the first quarter of 2021, economic researchers at the Handelsblatt Research Institute (HRI) expect a further decline of four percent. However, due to the ongoing Corona pandemic, unlike at the time of the financial crisis in 2009, the economy is not expected to recover in a straight line thereafter, but rather in a continuous “go-and-stop” (source: Handelsblatt.com), leading to a forecast GDP growth of 3.3 percent. The unemployment rate will rise from 5.9 percent to 6.3 percent, and inflation from 0.4 percent to 2.2 percent.
One thing is certain for 2021: the Corona pandemic will keep us in its grip even longer than initially hoped.
Back in November, we at SEDLÁK & PARTNER were bracing ourselves for the lockdown to last well beyond January 10, 2021, and hypothesized that tougher restrictions could be expected until at least Easter 2021.
We are all well advised to prepare for this scenario, and to keep a close eye on the day-to-day developments.
However, the lockdown can only be an emergency measure and not the solution. Smarter interventions than what we are experiencing at the moment are needed to reduce the infection numbers and overcome the Corona pandemic.
It is not only in the economic context where smart actions are needed. While many companies that are currently able to continue their operations despite the infection control measures have now found a way to deal with the Corona pandemic for themselves and their workforce, there is still no concept for schools and daycare centers. The constantly changing rules, adopted at short notice, are putting additional pressure on parents, as they did in the spring.
It is up to us as a society to bring together the different perspectives using the available system intelligence in order to develop holistic solutions. We will see whether we as a society will be able to successfully master the challenges ahead and where we will be at the end of 2021.
We wish our customers and partners the necessary insight and wisdom to continue to adapt to the uncertain conditions and to make and implement decisions that will ensure the long-term health of their own organizations.
With this in mind, we wish you a successful business year 2021.