DIHK industry survey

The Federation of German Chambers of Industry and Commerce (DIHK) on Wednesday revised its 2015 German growth estimate, boosting it from 0.8 percent expected in autumn last year to 1.5 percent now.

After conducting a survey among 27,000 German companies, DIHK said Europe's largest economy was "bravely defying" economic uncertainty, and added that the skepticism among businesse prevailing at the end of 2014 hadn't materialized.

"Low oil prices unburden both business and consumers, while a weaker euro boosts exports. Moreover, low interest rates fuel construction activity," DIHK chief Martin Wansleben said in a statement.

In addition to higher growth, this would lead to more jobs being created in Germany, the trade and industry lobby group said in its report as it expects 200,000 new jobs in 2015 - about 50,000 more than forecast in its 2014 survey.

Hidden pitfalls

Special effects such as lower oil and a weaker euro were, however, papering over worsening domestic risks to German growth such as rising labor cost and a growing shortage of skilled labor, DIHK said.

After the introduction of a minimum wage in Germany at the beginning of the year, about 42 percent of the companies polled see labor cost development as the biggest risk to their business. This makes rising wages their third biggest concern for 2015 after slumping foreign and domestic demand. Germany's widening skills shortage comes in fourth place.

As a result, the companies' investment activity is suffering, with DIHK predicting growth in this area to reach 2 percent - only half of the rate in 2014.

On balance though, a majority of German firms still sees their economic development positively, with 41 percent saying business was "good" and 50 percent describing it as "satisfactory." Only 9 percent said their business was worse than in 2014.

uhe/nz (Reuters, dpa, DIHK.de)