A report on industrial production and trade in products was prepared by BDI. Russwurm, who presented the report at the Hanover Industrial Fair, said that the German industry has not yet recovered from cost and demand shocks, excessively high energy prices, and inflation.
Russwurm stated, “The German industrial production is struggling with ongoing declines. Germany will probably shrink further in 2024. We expect industrial production to decrease by 1.5 percent compared to last year.”
Russwurm emphasized that the expected decline in industrial production indicates stagnation in exports this year, saying, “Despite expectations of a moderate recovery, we should not deceive ourselves. Overall production figures for the industry have been showing a worrying downward trend for years.”
Russwurm noted that they expect German exports to remain flat this year following a 1.5 percent decline last year.
In the report, it is stated that BDI expects the German economy to grow by 0.3 percent in 2024, while Russwurm pointed out that this means Germany will once again lag behind other major industrialized countries.
Russwurm commented, “Challenges continue to be significant for the industrial region. German companies are currently experiencing stronger growth and satisfactory profits, especially at their production facilities abroad.”
Highlighting the importance of strengthening the growth dynamics of the German economy, Russwurm said that with a growth trend as low as 0.5 percent, Germany cannot overcome major challenges such as digitization, decarbonization, and demographics.
BDI President Russwurm emphasized the need for more investment in industry, reducing bureaucracy, visible tax cuts, and reliable and affordable energy supply in Germany, stating:
“We need competitive energy prices that can be planned in the long term. Electricity grid fees must be significantly reduced, and the government must quickly concretize and prioritize the announced energy plant strategy and hydrogen strategy. Companies also urgently need less bureaucracy. In addition, corporate tax should be reduced to a competitive level of 25 percent. The current burden, which is almost 30 percent, is a serious negative factor.”
Meanwhile, the German Engineering Association (VDMA) maintained its forecast of a 4 percent decline in mechanical engineering production in Germany for this year.
source: aa.com.tr/ prepared by Melisa Beğiç