A recent survey by the ifo-Institute among German industrial companies has added to the negative news of the past two years. According to the assessment of the companies themselves, the German industry is losing ground in the international competition at a drastic rate. Almost a quarter of the surveyed companies, 24 percent, rate their own competitiveness in comparison to non-EU companies as low. Around one-fifth, 21 percent, share this view in relation to their competitors within the EU. What is particularly alarming is that nearly no company claims that its international competitiveness has improved.
All industrial sectors are affected. The German automotive industry is particularly hard hit, but the chemical and metal industries also report a significant loss of competitiveness. The ifo-Institute, however, assesses the situation as stable for the beverage industry. This may be due in part to the fact that the export of beverages to Russia has not yet been affected by the sanctions, with the exception of high import duties. The surcharge for the import of wine and spirits from “unfriendly countries” amounts to up to 25 percent.
With the beginning of the gas crisis and the sanctions regime against Russia in February 2022, a significantly higher proportion of companies in the German industry are losing international competitiveness, as was the case in previous years. Although the connection is evident, the head of ifo-surveys, Klaus Wohlrabe, recommends that the federal government should counteract by reducing bureaucracy and providing tax relief for companies. However, the potential of these measures to significantly increase the competitiveness of the German industry is more than questionable, as they are too limited in scope.