Investigation: Industrial closures impact the heart of the economy
During the economic slump last year, a study discovered that numerous industrial firms shut down. The construction sector experienced a growth of 2.4%, resulting in 20,000 companies. On the other hand, 11,000 companies in the processing sector closed, as explained by the joint study conducted by Creditreform and the Leibniz Center for European Economic Research (ZEW). This equates to an increase of 8.7% and marks the highest level since 2004. Many are worried about the decline in the industrial sector.
Patrik-Ludwig Hantzsch, head of Creditreform Economic Research, described the impact of these closures, saying, "We see stores that are closed and empty storefronts all around us, which can be both a financial and emotional blow to people. But these shutdowns within the industrial sector are particularly harmful to the core of our economy." Factors such as high energy costs, interrupted supply chains, labor shortages, and political uncertainty make it difficult for businesses to thrive.
Sandra Gottschalk, a ZEW expert, explained that research-intensive companies, like those in the chemical, pharmaceutical, or machine building industries, could be hardest hit. She said, "If the foundation of the economy doesn't keep growing, the number of closures in these sectors will likely escalate." The decline of research-intensive industries may not bode well for future innovation and growth in Germany.
Overall, around 176,000 companies shut down in Germany last year, a 2.3% increase from the previous year. Close to 11% of these closures were due to insolvency applications. The number of closures in the retail sector dropped slightly by 0.8% to approximately 37,000 firms. The consumer-oriented service sector, which consists of the hospitality, real estate, and healthcare industries, saw the number of companies close by around 51,000, a decrease of 0.5% when compared to the previous year. Other industries, including transportation and mining, were not examined in detail in the study.
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- To mitigate the negative impact of industrial closures on the national economy, it's crucial to conduct in-depth studies focusing on core industries such as chemical, pharmaceutical, and machine building, as these sectors form the base of our industrial industry.
- The decline in research-intensive industries not only poses a threat to the national economy's growth but also potentially hinders the development of innovative lock technologies, an essential part of the industrial sector.
- The majority of insolvency applications in Germany last year stemmed from the industrial sector, which highlights the need for targeted policies and support measures to secure the future of industrial firms and safeguard the industrial base of the national economy.
Source: www.ntv.de
