Ifo survey
Industry continues to lose competitiveness
German industry continues to lose ground: according to the Ifo survey, one in four companies reports declining competitiveness outside the EU - particularly in mechanical engineering. Even within Europe, there has been no turnaround.
In July, around one in four industrial companies reported a decline in their competitiveness compared to countries outside the EU. This was the result of an Ifo survey. The figure remained high compared to a previous survey in April. There is also no sign of a turnaround in intra-European competition: the proportion of companies with declining competitiveness compared to EU member states fell only slightly from 13.4% to 12.0%. "German industry is struggling with structural disadvantages - such as energy prices, regulation and investment conditions," says Klaus Wohlrabe, Head of Ifo Surveys. "Many companies are losing ground in global comparison as a result."
Competitiveness has not improved in any industrial sector recently. The mechanical engineering sector has been particularly hard hit, with the proportion of companies with declining competitiveness rising from 22.2% to 31.9%. This is the highest value measured to date. Competitive pressure also increased further in the electrical industry. In the automotive industry, on the other hand, significantly fewer companies rated their position more negatively than in the previous month. The proportion halved from 33.0% to 16.1%.
"The challenges for German industry in international competition remain enormous," says Wohlrabe. "Following the provisional agreement in the tariff dispute, German companies will have to live with a structural premium of 15% compared to competitors in the USA. It is still unclear whether this can be compensated for by new trade relations."
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