FRANKFURT -(Dow Jones)- Some German equipment makers look likely to defy gloomy economic trends and emerge as winners from the oil price crunch.
Booming revenues of the world's oil producers are brightening German engineering companies' prospects because petro-dollar recycling is creating demand for machinery, equipment and investment goods.
The economies of the Arab nations, Russia and some Latin American countries have grown more stable during the run on raw materials, which is also reflected in stable demand for emerging market bonds, said Commerzbank Chief Economist Joerg Kraemer.
"German exports into oil exporting countries are rising strongly, driven by investment goods," said Kraemer.
German engineering group Siemens AG (NYSE:SI) (SI) expects to cash a growing share of the money the world is spending on crude oil in a market dominated by the greenback.
The company says countries in the Middle East, the Russian-led Commonwealth of Independent States and Africa are increasingly ordering energy infrastructure.
"We also note increasing demand for energy efficiency solutions such as super efficient gas turbines," a Siemens spokeswoman said.
These trends were already reflected in Siemens' second-quarter ending Mar. 31, when orders jumped 46% from the same quarter a year earlier - more than in any other region.
German specialty technology maker GEA Group AG (XETRA:G1A) (G1A.XE) expects its business to benefit strongly from higher investments of energy companies.
"The rising oil price should help our business grow 5% to 10% per year mid- term," said Helmut Schmale, who will take over as GEA's Chief Financial Officer in 2009, told Dow Jones Newswires earlier this week.
GEA expects to benefit from higher demand for its products that help liquify natural gas, cool power plants as well as cutting-edge oil drilling solutions.
Schmale said crude oil is currently overpriced, but he doesn't think a drastic decline is likely either. Nymex Light Sweet Crude front-month contracts, the benchmark for oil prices, eased Wednesday to levels around$123.48 a barrel after registering a $135.09 all-time high last week.
German machinery makers are currently on a roll. New orders jumped 35% year- on-year basis in April, the sector's VDMA lobby said Monday. Notably, foreign demand for German machinery products was the main driver, soaring 44% during the same 12-month period. VDMA opened a new liaison office in Moscow last month.
In a survey of 300 eastern German makers of investment goods, economic think- tank IWH found "signs of euphoria" as nearly all firms reported optimistic earnings expectations.
In its most recent monthly report on the state of the German economy, the country's central bank, the Bundesbank, said petro-dollar will likely flow into the country.
Further, it also noted that global demand for green technology products will likely grow above average - a sector where companies like windmill maker Nordex AG (XETRA:NDX1) (NDX1.XE), Ersol Solar Energy AG (XETRA:ES6) (ES6.XE) or Solarworld AG (XETRA:SWV) (SWV.XE) have a competitive edge.
-By Roman Kessler and Alexander Becker, Dow Jones Newswires, +4969 2972 5514, roman.kessler@dowjones.com
(END) Dow Jones Newswires 06-04-08 1106 Copyright (c) 2008 Dow Jones & Company, Inc.
