Last Friday someone wished me a Happy New Year.
To me it feels more like Happy Old Year. The first
month has virtually passed and everything continues
as it was the last 6 months. Inflation has risen in
Germany to highest level (5.3%) since 1993 (5.8%)
and corporate transactions are at all time high. Will
it continue? Instead of creating a wave of
insolvencies (my expectation in 2020 –
I am a bad prophet)
Corona has lead to pretty much the opposite.
Most businesses (in Germany) in our monitoring had a
bumper year. What does this mean for
corporate acquisitions in Germany?
Inflation generally impacts negatively
on valuation of companies. Some of
these effects can already be
seen on German stock exchange,
which dropped by about 10% this month
until Thursday (recovered
a bit meanwhile). My personal observation
from speaking to many German companies
is that almost
everyone has either increased or plans to
increase prices. Most complain about
shortage of labor. I think inflation is going
to last for next 5 years at significantly higher
levels than in the past 10 years.
Let me know what you think about price
increases in your company and labor
shortages. What do you
think is going to happened to the
currency exchange?
What do you think about your pricing?