This article titled “German manufacturing firms predict good year ahead” was written by Helen Pidd, Berlin, and agencies, for The Guardian on Tuesday 27th December 2011 16.27 UTC

While Britain braces itself for a bleak new year with more lay-offs and creeping unemployment, more than 80% of German manufacturing companies say they think business will stay steady or improve in 2012.

Around 60,000 new jobs will be created as a result, according to the German Chambers of Industry and Commerce (DIHK) in its latest industry report.

The projections came as the German economy minister insisted Europe’s biggest economy will stay strong next year despite a tougher international climate and the fallout of the euro zone’s debt crisis.

“Our economy is looking very robust, even if the economic climate both internationally and on a European level has become more difficult,” Philipp Rösler told Handelsblatt daily.

Further optimism came from a government economic adviser, who said Germany would avoid recession.

Rösler, also head of Chancellor Angela Merkel’s Free Democrat (FDP) junior coalition partners, argued that domestic consumption, which he said makes up 53% of gross domestic product, was increasingly supporting growth.

“We are very well equipped to overcome the expected economic gloom over the winter,” he said, adding he was looking to the future with confidence.

While many British workers found their hours cut this Christmas, German car manufacturers BMW, Daimler and Audi had to ask employees to cut short their holidays to fulfil orders. Audi announced on Tuesday plans to hire 1,200 specialists in 2012.

The German Electrical and Electronic Manufacturers’ Association (ZVEI) expects growth of 5% and sales amounting to €190 billion.

The DIHK report, which surveyed hundreds of firms, found that 22% of companies with up to 500 employees in Germany were expecting business to improve in 2012, while 61% were expecting steady development. Only 16% were steeling themselves for things to get worse. In bigger firms, 20% were anticipating an uplift in business, 65% for things to stay the same and 15% a downturn.

But declining demand from abroad for German goods due to an international slowdown is likely to hit trade which is crucial for export-reliant Germany.

Despite his upbeat remarks, Rösler is expected to downgrade growth estimates for 2012 when he delivers the next government forecast in January. At the moment, the government is officially still forecasting growth of 1.0% for 2012 after expected growth of 3.0% in 2011.

Wolfgang Franz, the head of a panel of government economic advisers, said he expected growth of about 0.5% next year, half his earlier prediction.

“But I do not fear a recession – certainly not one as strong as in 2009 when GDP shrank by about 5%,” Franz told Handelsblatt.

He said employment remained high, industrial capacity was being better used than the long-term average and companies were healthy and confident. “Germany is doing well, at least for now.”

Franz also attacked International Monetary Fund chief Christine Lagarde for warning that the world economy was in danger.

“It is right to point to the risks … but you can also talk yourself into a recession. Mrs Lagarde would be well advised to be more cautious with her choice of words.”

Finance minister Wolfgang Schäuble said at the weekend he was confident investor confidence in the euro zone would return despite the turmoil of the last few years.

The optimism was backed up by the Ifo index, which measures German business sentiment. It has been rising again for the past two months, while the GfK consumer confidence index also rose in December. German exports for 2011 were worth over €1 trillion ($1.3 trillion) – the highest figure ever. The number of people in work has also risen to 41.6 million, more than ever before.

But in a sign that the German government is mindful of tough times ahead, it announced on Tuesday plans to ease visa controls next year in an attempt to help thousands of people and companies from Russia and China.

“I am pushing for a liberal visa policy which reflects Germany’s role in a globalised world,” Guido Westerwelle told Reuters.

The new rules are designed to simplify and speed up visa issuance by demanding fewer documents, making forms available on the internet and ensuring decisions are made within 72 hours.

Some of the administration will be outsourced and individuals, especially business people, will no longer be required to appear to German authorities in person.

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