Germany’s machine builders see themselves prepared for the expected economic downturn in the coming year. “We continue to expect a slight real decline in production of 2 percent for 2023,” said Karl Haeusgen, President of the VDMA industry association, on Tuesday in Frankfurt. “This is definitely not a crisis” and shows the robustness of the machine builders. For the current year, the VDMA is confident of achieving the target of production growth adjusted for price increases (real) of one percent. The shortage of skilled workers is a major concern.
The mood has brightened a bit
According to the association, the environment for the export-oriented German key industry with more than one million employees is difficult. Haeusgen spoke of “rough seas”. Growth in China is expected to remain weak, the war in Ukraine will keep energy prices high, and interest rates will rise. “This will weigh on the global economy and thus also the capital goods industries for the foreseeable future,” said Haeusgen. “Nevertheless, the mood in many countries around the world has not been as negative in recent weeks as it was in the first few months after the start of the Ukraine war.”
According to the industry association, almost half of the machine builders surveyed at the beginning of December (48 percent) are optimistic or cautiously optimistic about the new year. Another 38 percent are undecided, only 14 percent are pessimistic or cautiously pessimistic.
More than half of the machine builders (54 percent) want to expand their workforce in the coming year, and a good 30 percent want to keep it constant. The shortage of skilled workers is of particular concern. Almost all companies surveyed (97 percent) feel bottlenecks here. A total of 14,000 positions are currently vacant. According to many companies, the labor shortage is hampering production and dampening growth.
Further free trade agreements required
The VDMA also sees the growing regulation as problematic. Haeusgen criticized that the planned electricity and gas price brakes in Germany had become too complex, particularly as a result of the European subsidy regulations. Despite the high costs, the first machine builders wanted to refrain from taking advantage of the aid.
According to the industry association, the Chinese market, which is important for machine builders, cannot be replaced in the short or medium term. Therefore, the export promotion instruments should not be dismantled, said Haeusgen. He still believes China can be kept in the world economic community. However, German politics should help with its funding instruments to open up new sales markets. In addition, the EU must conclude further free trade agreements with partner countries in Asia and finally implement the agreement with the South American economic alliance Mercosur.
