The North German metal and electrical industry faces a significant crisis, marked by alarming statistics. A staggering 40% of companies report having no orders, while capacity utilization stands at a mere 82%, the lowest in almost two decades. Compounding the issue, 71% of firms do not anticipate any sales growth, prompting 22% to consider relocating production, particularly in the automotive and aerospace sectors. The attractiveness of Germany as a production location is diminishing for two-thirds of these companies, primarily due to escalating costs. Industries such as foundries, metal products, and mechanical engineering are notably impacted.
As collective bargaining unfolds, the Lürssen Group calls for a timely resolution, while AGV Nord and the federal government are urged to streamline taxes and reduce bureaucratic hurdles. Alarmingly, 19% of companies are cutting jobs amidst an ongoing shortage of skilled workers and a lack of training applicants.
A recent study emphasizes the urgent need for investments amounting to €1.4 trillion by 2030, likening it to the post-World War II Marshall Plan. These funds are crucial for infrastructure improvements, digital transformation, and addressing the skilled labor gap. Unfortunately, smaller and medium-sized enterprises struggle to benefit from existing funding programs.
The situation is exacerbated in Bavaria, where industrial production has shrunk by 4.4% from January to August 2023, with the machinery sector declining by 6.9%. Overall, industry leaders warn of dire consequences if action is not taken, calling for a comprehensive reform agenda to revitalize the sector.
