German medical technology sector withstanding economic crisis

27 March 2009

Only 4% of companies in the German medical technology sector have reduced their workforce as a result of the global financial crisis, according to a survey conducted by the German Medical Technology Association, BVMed.

120 BVMed member companies participated in an online survey in March 2009 that looked at the consequences of the crisis on the sector. The indirect consequences of the economic crisis, however, certainly do pose challenges for the sector, says BVMed.

According to BVMed, two very powerful external factors have an impact on the development of the German medtech sector this year:

  • the health pool with the morbidity-risk-based fund adjustment for German health insurance payments: the new health pool is the cause of much uncertainty, but it also offers the chance for health insurance funds to redirect their attention towards the quality of service to patients. The health insurance funds will develop innovative care concepts that seek medtech companies as partners.
  • the global economic and financial crisis: losses in sales and job cutbacks are the consequence. Experts call the healthcare market more robust or even crisis-proof, especially if the German healthcare services are covered by the statutory health insurance.

The survey results confirm that on the whole the German medtech sector is well-placed in the market landscape:

  • one fourth of the companies currently feel no consequences of the economic and financial crisis on their business operations;
  • only one third of the companies report drops in sales in the first months of 2009 compared to the good previous year;
  • actual measures such as calling a stop to hiring were initiated by 32% of the companies. Only 4% of the companies participating in the survey have had to reduce jobs in connection with the economic crisis so far;
  • more drastic consequences, such as problems gaining credit for financial requirements, withdrawal of investors, shutdown of production capacities or reduced working hours play no or only a very slight role for the medtech companies;
  • rather, companies primarily perceive general problems of the industry which have been observed for years, independent of the economic crisis: for instance a stronger downward pressure on prices cited by 57% of the companies, as well as a generally more strained financial situation mentioned by 43%.

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