The financial and economic crisis that originated in the USA in autumn of 2008 and triggered a global economic conflagration had the global economy on tenterhooks in 2009. Collapsing international trade, declining business investment and weak demand on the part of increasingly unsettled consumers led to the worst recession since the Second World War. Although government stimulus programmes, injections of capital for banks that were ‘too big to fail’ and the low interest-rate policies by central banks helped financial markets and the economy as a whole gradually stabilise in the second half of the year, real gross domestic product worldwide fell by 2.3 per cent.

The experience of the economic crisis differed, however, from one region to the next. Hardest hit by the economic turmoil were export-oriented, industrialised countries. In the United States, economic output fell by 2.7 per cent; in Japan, it fell by 5.4 per cent, and in the Federal Republic of Germany it dropped by 5.3 per cent. Nearly all of the key German industries experienced sharp drops in production. In mechanical engineering, sales collapsed by 23.1 per cent; among motor-vehicle manufacturers, sales were down 20.5 per cent; in the electrical industry, the drop was 17.0 per cent; and in the chemical industry 17.7 per cent. In the chemicals industry, business with chemical raw materials (-21.1 per cent) and man-made fibres (-24.5 per cent) was particularly hard-hit by the crisis.

The year 2008 posed a lot of challenges, and the company emerged from them even stronger. 2008 has been the most successful in the short corporate history of the new Messer World, to which Messer Group belongs as a producer of industrial gases. In spite of the economic crisis, which began back in the autumn of 2008, we have been able to achieve high growth in turnover and earnings. So my thanks go primarily to all our employees, who have contributed to this success with their committed efforts, and I thank you for your confidence.

Stefan Messer, Sulzbach 2008

http://annualreport2008.messergroup.com

Despite a rather ambivalent development over the course of the year, in 2007 the global economy remained on the whole resistant to crisis, with global gross domestic product achieving a stable rate of growth of around 5 percent. After three vigorous quarters, the last quarter of the year saw the global economy lose a significant degree of momentum. The "sub-prime crisis" in the USA, growing anxiety in the financial markets, the sharp rise in the price of oil and the rising prices of foodstuffs all had their effect on the American economy in particular, which at 2.2 percent grew more slowly than in the previous year (2.9 percent). The offshoots from this crisis also affected the euro area which increased its GDP by 2.6 percent overall; however, in the final quarter poorer results were recorded for economic production overall. This was countered, according to the analysts at the German Federal Bank, by the "threshold and raw-material countries continuing along a rapidly rising expansionary path", which applied both for the People's Republic of China which once again achieved growth in GDP of 11.4 percent, and for the Eastern European area alike.

The distinctly "more moderate pace in the euro area" was, in the opinion of the German Federal Bank "primarily due to the slowdown in growth in Germany and France". At the same time, the development of German economy kept pace with that of its global equivalent. In comparison with the first three quarters (+0.7 percent in the summer quarter), Germany's economy grew more slowly in the final quarter (+0.3 percent), finally achieving a rate of growth in GDP of 2.5 percent averaged over the year. The reasons for the downturn in the last three months lay in the level of investment in construction and weak domestic demand which also put the brakes on imports and in meagre private consumption. The chemicals industry and the mechanical engineering sector found grounds for satisfaction, having increased their production levels over the previous year by 4.5 percent and as much as 9.5 percent respectively.

With growth in terms of gross domestic product across the world running at 5.4 percent, 2006 saw the global economy remain on an expansionary course, supported in the first six months by the healthy US economy and in the second half of the year by the positive economic situation in the EU and Japan. Added to this were the continuing high rates of growth in the countries of the Far East (including Singapore: 7.9%, Hong Kong: 6.8%, South Korea: 5.0%, the Republic of China (Taiwan): 4.6%). The high prices of raw materials across the board exerted a braking effect, but also ensured that the supplier countries such as Russia raked lucrative takings into the national coffers.

In Germany, the economy was also seen to be in good health, with gross domestic product rising by 2.8 percent. The driving force here was private consumption once again, which also picked up under the effect of the increased rate of VAT, falling unemployment figures and rising levels of income. On the other hand, the construction sector managed to end a downward trend which had persisted over the last 10 years, recording growth of 4 percent, which was due predominantly to brisk corporate investment, thus making a significant proportional contribution towards the upturn in the general economy in Germany. Although German products had to deal with the consequences of the strong euro and rising prices in the dollar countries, exports - which once again rose by 13.7 - remained the pillar on which the economy was based. Overall, German industry recorded growth in sales of 6.5 percent, with both the chemicals industry (+6.4 percent), which generated an increase in its foreign business in particular (+7.9 percent) and the traditionally export-oriented mechanical engineering sector (= 9.8 percent, with the export share of overall growth rising to 55.7 percent) producing very good ratios.

In spite of considerable rises in energy and raw material prices, overall growth in the global economy continued, up by 4.8 percent. 2005 was also characterised by the striking imbalances in growth dynamics that had been in evidence for a number of years. The increase remained somewhat below average in the G7 states (the USA, Japan, Germany, France, Italy, Great Britain and Canada) which recorded a growth rate of 2.7 percent, while the annual figures for gross domestic product in, for example, Latin America or in the Far East and South East Asia were running at 8.6 percent. With an average rate of growth in GDP of only 1.3 percent, the economies in the euro area lagged clearly behind the boom regions of the global economy.

In 2005, Germany's economy developed with significant independence from the global peripheral conditions. This saw the sound global economy, for example, clearly stimulating German exports, which rose by 7.5 percent. Also serving as a driving force for economic development were investments in plant and equipment undertaken for the purpose of modernising out-of-date systems. Conversely, the perceptible rise in crude oil prices which contributed, among other things, towards driving down private domestic consumption, exerted a dampening effect on the economy. All in all, at 0.9 percent, overall economic growth was weaker than in the previous year. The production sector just failed to reach the outstanding key figures recorded in 2005, however still managed a considerable increase in sales of 4.6 percent. The most successful sectors included mining (19.7 percent), metal production (12.8 percent), the chemicals industry (6.7 percent) and mechanical engineering, which occupied the leading position in export statistics for world trade, finding customers for its products above all in the USA, France, China, Italy and also, to an ever greater extent, in India.

The economic revival in the United States and the continuing high rates of growth in the countries of the Far East were the primary reasons for the global economy growing as dynamically in 2004 as it had last done in the 1970s. Global gross national product was up by 5.1 percent and global trade by around 9 percent. In addition, a stimulating effect on the global economic climate was exerted by the continuing good peripheral conditions for companies in terms of financing new investments along with price increases in the equity markets. Globally, production recorded gains of around 4.5 percent. With figures of 2.8 to 3 percent, the industrialised countries in North America and Europe achieved growth rates which once again failed to keep up with the rapid industrial development occurring in numerous countries in Eastern Europe (6 to 8 percent) or in China (around 10 percent). In the wake of the sound global economy, the German economy also managed to improve its economic figures, which had been poor for the last three years, without, however, managing to create any self-perpetuating growth. Above all, it was the healthy export economy in the first half-year which suffered in the second half-year under the significant rise in the price of oil and the strong increase in the value of the euro that allowed gross domestic product to rise by 2 percent. With the participation of almost all segments, the industrial sector drove growth in sales up by 5.6 percent. Metal production rose by 16.2 percent, coal mining by 12.4 percent, the automotive industry by 10 percent, mechanical engineering by 7.1 percent, electrical engineering by 6.3 percent and the chemicals industry by 4.6 percent. By way of contrast, the economic situation in the clothing and furniture industries remained under pressure.

The upturn in the global economy in the second half of the year - after a rather unpromising first six months - saw global added value rising by 3.9 percent overall. There were respectable figures for growth achieved by the USA (3.1 percent), Japan (2.7 percent), the South Korea (3.1 percent) and the CIS states (7.6 percent). The global expansion of the production sector (with IT also returning unusually strong sales figures) was particularly due to the Far Eastern countries of China, Japan and South Korea.

In Germany, however, the general economic situation remained precarious and (similarly to "Euroland" as a whole), still marked by the symptoms of crisis. Corporate investments and those from the public sector were low, suffering from the expectation of low profits, with domestic demand and outlays on private consumption stagnating, the number of corporate insolvencies increased, many share prices fell, energy prices (particularly for crude oil) remained at a high level across the board and the number of people in employment fell. Even a foreign trade surplus of EUR130 billion could not stimulate the weak economy to any significant extent. As a result, gross domestic product fell for the first time since 1993, down -0.1 percent. Overall, German industry increased its sales by only 0.6 percent, however when price changes were taken into account this actually was the equivalent of a slight de facto fall. Once again, the construction and clothing industries, mining and the printing sector were affected by the recession. Stagnation had less of an effect on the chemicals industry which still managed to increase its sales by 1.6 percent, above all improving its foreign sales by 2.1 percent. In mechanical engineering, foreign demand (foreign sales rose by 1.4 percent) for high-tech products in particular still did not prevent the sector from seeing out the year with a fall in sales of 0.2 percent.

In 2002, the development of the global economy was determined by numerous ambivalent factors and by peaks and troughs. The crises in the last quarter of 2001 initially gave way to a perceptible upswing in the first half of 2002; however, the second half of the year saw this upswing significantly losing momentum. Although global added value rose by 3 percent, it once again failed to match the average figures recorded in the 1980s and 90s. The actual "motors" driving global wealth forward were yet again the economies of the former Eastern Bloc, the threshold countries of the Far East and South East Asia and the USA. Conversely, Western Europe, Japan, Latin America and Africa contributed little towards global growth. The reasons for this cautious global economic growth were numerous. After the attacks of 11 September, institutions and the major economic players remained nervous about the clear-cut danger of terrorist attacks and the regional military conflicts, as in the Middle East countries of Iraq, Palestine and Afghanistan. The disquiet in the financial markets and the slump in various equity prices also upset the global economic climate, as did the extensive public debate about falsified balance sheets and inaccurate auditing among large-scale corporations.

Weak domestic demand and a rather low level - viewed over the course of time - of growth in exports of 2.6 percent held back the economic recovery in Germany which achieved economic growth of only 0.2 percent. Gross capital investments shrank by a further 6.8 percent and investments in plant and equipment by as much as 9.4 percent. In production, there were numerous sectors (in particular the textiles, construction and printing industries and electrical engineering) which were affected by falling sales figures. The chemicals industry also had to deal with falling sales (-0.2 percent in comparison with the previous year), however, it did manage to increase its exports slightly by 0.5 percent. In mechanical engineering, sound foreign sales ensured that the sector recorded a slight increase in sales, up 0.3 percent. Finally, 2002 brought with it an important milestone for everyone in Germany, with 1 January seeing the introduction of the euro.

After the fourth quarter of 2000 saw the global economy losing some of its momentum, there was an unexpected crash in growth rates across the world. In global terms, the economy achieved a rate of growth of only 2.3 percent, and world trade just 1 percent. The seven leading industrial nations also suffered reverses and produced an average rate of growth of 1.2 percent. The reasons for this were that the economy of the United States dipped appreciably, oil prices were soaring, the "New Economy" (particularly the telecommunications and media sectors) turned out to be much more susceptible to crisis than had been anticipated and the terrorist attacks of September 11 unsettled the major economic players. Unchanged high rates of growth were recorded by the economies of Central Eastern and Eastern Europe (2000: 6.6 percent, 2001: 5 percent, CIS states overall: 6.2 percent).

The slump in the global economy had a direct effect on the German economy which could record no more than a slight increase in gross domestic product of 0.6 percent. The falling demand in Asia and reduced business with the USA imposed a burden on production companies which, all in all, cut back considerably on their investments; the chemicals industry was also unable to escape the effects of the global crisis. In numerous European countries (among other things due to the weak economic situation in the automotive sector) lower production figures were recorded. This saw the chemicals industry suffering a fall in sales of 0.9 percent, down to 1.8 percent. The most successful business continued to be done in the biotechnology, pharmaceuticals and hygiene articles sectors. Mechanical engineering was still strong, having once again increased its sales by 1.8 percent. Once the current orders had been worked through, however, demand fell away distinctly through to the end of the year.

At the start of the new millennium, and, particularly, in the first half of the year, the global economy appeared to have recovered from the crises of the 1990s and grew overall by 4.8 percent. Global trade expanded by an extraordinary high 13.4 percent, the global currency system appeared stable and raw material prices remained low, with the exception of energy prices. However growth in the main industrial countries did vary. The USA, Canada, Ireland, Finland, the South Korea and the Republic of China (Taiwan) made a particular contribution towards global growth. At the same time, the countries of Eastern and Central Eastern Europe and the threshold countries of the Far East and South East Asia were among the regions displaying the most notable growth rates.

The booming global economy also stimulated the economy of Western Germany. With an increase - slightly below average in the international comparison - of 3 percent in gross domestic product (priced in 1995 terms), the German economy grew at a rate in excess of anything seen since reunification. The sound economic situation in industry was due primarily to the notable level of foreign orders, which displayed a clear rate of increase, up 17.5 percent, with, conversely, the rise in oil prices and the devaluation of the euro resulting in low domestic demand. Both nationally and internationally, the chemicals industry was one of the main growth sectors. With domestic demand recovering in Germany and exports increasing by as much as 18.3 percent, both production and sales picked up sharply, with overall sales rising by 11.2 percent over the previous year. After the crisis of 1999, mechanical engineering also displayed a clear-cut recovery and increased its export figures by 11 percent and its sales by 7.1 percent, also thanks to the brisk demand from German industry.