Global economic situation

The Eurozone moved into recession in the first half of 2003. Following a return to growth in the third and fourth quarters, slight macroeconomic growth of 0.5 percent was recorded for the year as a whole. Gross domestic product in Germany fell by 0.1 percent. For the US economy, growth of 3.1 percent in 2003 represented a much better performance than the previous year. The recession in Japan has been overcome and the economy there grew by 2.2 percent. In the People’s Republic of China, retail industry sales improved by 9.1 percent despite the negative impact of the SARS epidemic, and the country’s exceptional economic trend continued.

The situation in the sectors supplied by the Freudenberg Group may be summarized as follows: the West European automobile industry sold 14.2 million vehicles; although this was 1 percent down on the previous year, the slump feared by many did not in fact materialize. At just over 1 percent, the decline in sales in the USA was also moderate. The Japanese automobile industry had a good year.

The downturn in the German construction industry has still not come to a halt. Investment in this sector fell by 3.7 percent. Although sales in the German mechanical engineering sector were down by just over 1 percent in 2003, the clear rise in orders in the last quarter of the year encourages hopes of a recovery there. For the clothing industry in Europe and the USA, prospects remain poor. The entire industry is going through a restructuring process, demand for textiles declined and the trend to relocate production capacity to Asia is becoming more pronounced. The situation in the information and communication industry and the electronics industry improved in 2003. In the German retail industry, the downturn eased slightly, with sales only down by 1 percent.