German Road Transportation: Lower oil prices to give short term relief to sector's profitability

5/4/2015 - Report
ic_blogtagGermanyTransportationIndustryManufacturingPriceSector Risk
The road transportation industry is a key asset for Germany's manufacturing sector. In line with sluggish economic growth, Euler Hermes expects gross output to grow +4.5% in 2015 and 3.8% in 2016, after +5.9% between 2010 and 2014.

The German transportation sector is charaterized by its fragmentation and suffers from rising labor costs hampering competitveness domestically and abroad.

2015 will see low oil prices boost margins (0.6pp), this effect is mostly offset by higher wages (-0.5pp) but will not persist in 2016 lowering margins to 1.8% from 2.0%. Similarly insolvencies will rebound to 1700 cases in 2016.

Quality services, specialization and flexibility, as demonstrated by key players are proven investments to stand out from the crowd

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German Road Transportation: Lower oil prices to give short term relief to sector's profitability - Report