Annual Report 2006

• The Economy
• Market Research Industry
• Economic Development
• Research and Development
• Human Resources
• Organization and Administration
• Purchasing
• Environmental Protection
• Marketing and Communications
• Risks
• Major Events
• Outlook

The Economy

Overall economic development: robust growth
 

The upturn in the global economy gained in scope in 2006 by comparison with the previous year with global GDP up from 4.6% to 4.7%. Despite tighter monetary policy, the slowdown in the rate of growth in the USA was lower than expected. Fears that the growing balance of payments deficit in the USA and the weakness in the housing sector would have a more pronounced effect on economic expansion in the USA were not confirmed. The economy was again very strong in South East Asia, particularly China, and the increasingly tighter monetary policy of the Tiger states led to stabilization. In contrast, the upturn in the EU started somewhat later and remained stable after unexpectedly fast growth. At 2.8%, growth was higher than forecasts at the beginning of the year had indicated.
 

 
The national economies in regions and countries important to GfK performed as follows:

GERMANY reported a surprising trend reversal in 2006 and at 2.7%, the upturn in the economy (calendar adjusted) reached its highest level for the last ten years apart from 2000. This was accompanied by a decline in the rate of unemployment. The impetus for growth came both from the domestic economy as well as abroad. The increase in VAT at the beginning of 2007 and the football World Cup led to a special business cycle in the German economy.

This was also confirmed by the results of the monthly GfK consumer climate survey. Throughout the fourth quarter of 2006, index values showed the highest level relating to the propensity to buy since November 2001. 

 

• In member countries of the EUROPEAN UNION growth in GDP was strong on the back of the better than expected upturn in the German economy. GDP in the EU rose by a good 2.8% in 2006.  
  
  
• In general, the trend in the economy in the new EU countries was very robust and the pace of economic growth is increasing as a result of rising demand from abroad.
  
  
• In the USA, the increasing trade imbalance has further curbed the pace of economic growth. One of the reasons for this is the considerable downturn in the boom in the housing sector, the longstanding engine of the US economy. After 3.6% in 2005, growth amounted to 3.3% in the past financial year and with forecast values of between 2.5% and 3.2%, economists hope the economy will have a soft landing.
  
  
• In LATIN AMERICA the economy has also slowed slightly after cumulative growth of 23% over five years. However, the signs indicate that the positive trend will continue.
  
  
• Growth in the global economy was again driven by the Asian countries in 2006. Since its recovery in 2004, the economy in JAPAN has maintained a stable growth course. As a result of the good performance reported by virtually all the neighboring countries, exports enjoyed further year-on-year growth.
  
  
• As in the prior year, the boom in the macro-economies in the most populated countries in the world, CHINA and INDIA, strengthened again in 2006 despite warnings from some quarters that these markets were overheating. We do not have adequate statistics to explain the Chinese phenomenon. In 2006, China was not only the second biggest export nation in the world, knocking the USA off this spot, but now ranks ahead of Japan as holder of the largest foreign currency reserves, estimated at USD 1,000 billion.

With the exception of Thailand, which had to deal with a change in political leadership, the smaller countries in SOUTH EAST ASIA were again able to achieve above-average growth in 2006.

 

 

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GfK Annual Report 2006

GfK Management Report