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Business

Some German Sectors Profit Despite Recession

In the face of the global financial crisis world economies are in freefall. Surprisingly however, some German businesses are coming out on top: Used machinery and security services seem to be riding the storm.

A yellow sign reading 'Rezession' with arrow pointing downwards

A recession doesn't necessarily mean economic loss for everyone

Despite dire warnings of slowing economic growth, some German industries are still firmly in the black. On the smaller scale, second-hand markets and thrift stores have always met the demand for cheap goods. Lately though, it is the second-hand heavy goods industry that is booming.

The security industry also seems to thrive on global uncertainties. Companies attempting to cut costs are outsourcing security to private firms, which -- with the added fear-factor that has plagued society since 9/11 -- are the beneficiaries of someone else's crisis.

View through a cogwheel gearing of a windpower station at industrial trade fair

When the budget shrinks, companies look for used machinery

It's not the first time outsourcing has boosted the private sector. The German military uses non-state companies for clothing, catering and vehicle-maintenance services. Statistically however, the security industry's growth rate has exceeded overall economic development.

"Growth in this sector is likely to stay steady at between three and five percent," said Oliver Arning of the German security services business association (BWDS). "People just feel happier and safer when they feel the presence of security personnel."

Second-hand is in demand

Second-hand dealers are recession's other winners with a growing demand for heavy goods and automobiles. Company directors and financiers in charge of the purse strings have become hesitant about investing in new goods and equipment.

"During economic lows people don't want to invest in expensive, new equipment," said Jens Nagel, director of the Association of German exporters. "We are seeing a surge in demand for good high-quality used machinery and equipment from Germany."

Energy efficient and clean energy second-hand products have also become profit spinners, specifically in foodstuff production and packaging. Operating machinery and second-hand cars are another sector in high demand.

International markets broaden

Second-hand consumers are predominantly foreign buyers from recent EU member states or countries expecting to join the bloc in the near future. According to Nagel, imports of German used goods have risen in Romania, Bulgaria, the Balkans and Turkey. More recently, interested buyers from Africa have also joined the scene.

Turkish, Bulgarian, Romanian and EU flags

New and future EU members drive the second-hand market

Nagel said he sees a similar trend developing in Central Asia. "Countries undergoing rapid economic growth often come looking for cheap high-quality machinery and equipment to keep pace with rising production."

Official estimates suggest that the used goods industry generates around 100 billion euros ($131 billion) a year worldwide. And this sector shows no signs of slowing, not at least while the credit crunch lasts.

Florian Hess, a trade fair organizer form Karlsruhe, is still doing a tidy business. He organizes the annual RESALE fair and is fairly certain that next year's figures will put him ten percent up in profit. "It's a second-hand merchant's market," he said.

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