Are German industries on the decline?
For decades, they were the gold standard: German cars, machines,
paints, varnishes, medicines, radios and televisions.
Many products with the label "Made in Germany"
dominated world markets.
And today?
Germany has slipped into a recession and in 2023 was the
only country among the largest industrialized nations with
negative economic growth.
And: almost all former flagship industries were affected.
There are many reasons for this.
The automotive industry: German car brands initially slept through
the transformation to electromobility, and are now
lagging behind in battery production and hardly offer any
affordable EVs.
China is now leading the way in car manufacturing.
The chemical industry: BASF, still the chemical company with
the highest sales in the world, shut down several plants at its
main site in Ludwigshafen and cut thousands of jobs.
One reason: the high energy costs in Germany, which are also
causing problems for the automotive industry.
The pharmaceutical industry: it's also suffering from the price of
electricity and gas, but also from bureaucracy: nowhere else does
the approval of new drugs take as long as in Germany.
The only exception was the coronavirus vaccine from
BioNTech.
However, many companies are now turning their backs on Germany
because they can produce more cheaply in Asia.
Mechanical engineering: machines from Germany were once the top
export, with more than 80 percent sold abroad.
However, demand has now collapsed due to the poor
global economic situation.
High energy prices and a shortage of skilled workers are also
weighing on the industry.
Only the German electronics industry seems to be
defying a crash.
It is benefiting from digitalization and the continued
high demand for computers, cell phones and the like.
Overall, however, the outlook for the most important German sectors
remains rather bleak.
There is a lot of catching up to do, particularly in terms of
energy prices, digitalization, de-bureaucratization and the
transformation to a green economy.