Berlin/Frankfurt (Reuters) - German companies from the IT, telecommunications and consumer electronics sectors can look forward to sales of more than 200 billion euros for the first time in 2023.

The increase will probably be 3.8 percent, with revenues totaling 203.4 billion euros, predicted the digital association Bitkom in Berlin on Tuesday. At the same time, the number of employees is expected to rise by 3.4 percent to 1.352 million.

"We need to step up digitization in business, administration and society and should do more than just add a scoop," said Bitkom President Achim Berg. "We need a real digital policy turnaround." It would help to overcome current challenges such as climate change. The state must also become capable of acting digitally. In addition, data must be used in a more targeted manner and the structural shortage of skilled workers must be remedied.

According to Bitkom, 126.4 billion euros are expected to be generated in the information technology (IT) sector this year. This corresponds to an increase of 6.3 percent. One of the growth drivers here is artificial intelligence (AI), with an increase of almost 42% to 1.1 billion euros. However, collaboration software and security programs also recorded above-average growth rates of 15.6% to EUR 1.6 billion and 11.4% to EUR 3.3 billion respectively. Following the boom in the pandemic years, however, sales of laptops are likely to shrink by 3.4% to EUR 6.4 billion.

The telecommunications market will only grow by 0.8% to 69.5 billion euros in 2023. Rising investments in network expansion (up 2.5% to EUR 7.7 billion) will be offset by stagnating business with telecom services, which account for the lion's share of this sector at EUR 49.7 billion. "Despite higher bandwidths, more data volumes and increasing usage, sales can hardly be increased in the face of fierce price competition," explained Bitkom President Berg.

Telefonica Deutschland is nevertheless trying and has announced price increases. "More service for the same price is - unlike in the past - no longer possible," company boss Markus Haas recently told the "Handelsblatt" newspaper.

CONSUMER ELECTRONICS WEAKENS AGAIN

According to Berg, the consumer electronics sector is facing its third consecutive year of declining sales. The drop will be 7.3 percent to 7.6 billion euros. "High inflation and economic uncertainty are hitting business particularly hard. Many people are keeping their money together and are foregoing major purchases here in particular."

Bitkom puts global IT and telecommunications sales at 4.33 trillion euros for 2023. The USA will account for almost 36% of this. Germany follows in fifth place with a share of 4.2 percent. "We need to make more of an effort," warned Berg. "Too little investment in IT and telecommunications makes it harder for all sectors to remain competitive and take a leading role in the innovation race."

(Report by Christian Krämer and Hakan Ersen, edited by Ralf Banser. Edited by Ralf Banser. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)