Germany is becoming increasingly unattractive for companies
Lower energy costs, less bureaucracy: compared to Germany, other industrial locations offer clear advantages for companies. A survey has now shown that many companies are already drawing the necessary conclusions. Two sectors in particular believe that Germany's attractiveness is continuing to decline.
According to a survey, Germany is rapidly losing its appeal as an industrial location. Two thirds of the companies surveyed have already relocated parts of their value creation abroad, explained the consulting firm Deloitte. In the mechanical engineering and automotive sectors, a particularly large number of the decision-makers surveyed expect Germany to become even less attractive as a business location.
45% of the companies surveyed expect Germany to fall further behind other industrial locations. Among companies in the mechanical engineering and automotive industries, the figure is as high as 65%, of which almost two thirds expect a significant loss of attractiveness and one third a slight loss. According to Deloitte, however, in the other sectors - including chemicals, construction and transport and logistics in particular - the assumption that the attractiveness of the location will remain the same predominates (46%). As many as 20 percent assume that attractiveness will increase.
67% of the companies surveyed have already reacted to the situation by relocating their value chain to a moderate to large extent. According to the survey, these relocations have so far concentrated on component production. However, planned relocations are also increasingly affecting "higher value-added parts" such as pre-assembly and production in general. Areas of the company that are rarely considered for relocation are purchasing, associated services, research and central corporate functions such as management, marketing and sales.
Asia and the USA are important investment destinations
According to the survey, the most important reasons for investing in other countries are lower energy costs (59 percent), lower wages (53 percent), a better market environment (51 percent) and less bureaucracy (50 percent). Access to raw materials, better investment conditions or subsidies, good logistics connections and the availability of qualified workers were mentioned less frequently.
The mechanical engineering and automotive industries are primarily attracted to Asia and the USA for the reasons mentioned. In the other sectors, however, other EU countries predominate as investment destinations. There are also noticeable trends in the other sectors towards relocations from Asia to the USA or Europe. Among the EU countries, Poland, Romania and the Czech Republic are mentioned particularly frequently.
According to Deloitte, the vast majority of companies surveyed believe that Germany will lose out in the current subsidy race with the USA and China. Even though a majority of 36% emphasize that Germany must become more active here, company representatives, particularly in the mechanical engineering and automotive industries, are not generally calling for more subsidies or investment incentives, but primarily for a reduction in bureaucracy, competitive energy prices and investment in education, infrastructure and digitalization.
According to Deloitte, it surveyed 108 "supply chain managers" in large companies (83%) and small and medium-sized enterprises (17%) in September with the support of the Federation of German Industries.
In light of these findings, many auditors are now acknowledging the shifting industry landscapes, with several large companies in Germany considering relocating to countries like Asia or the USA due to lower energy costs, wages, and bureaucracy. Despite this, only a third of the companies in the mechanical engineering and automotive sectors are calling for more subsidies or investment incentives; instead, they are advocating for reduced bureaucracy, competitive energy prices, investment in education, infrastructure, and digitalization to maintain Germany's attractiveness as an industrial location.
Source: www.ntv.de
