German industry struggles with global competitiveness: ifo
'German industry is struggling with structural disadvantages, such as energy prices, regulation and investment conditions,' said Klaus Wohlrabe, head of surveys at ifo . 'Many companies are losing ground in a global comparison as a result.'
Competitiveness has not improved recently in any industrial sector. Mechanical engineering has been hit especially hard, with the share of companies with declining competitiveness rising from 22.2 to 31.9 per cent, the highest figure to date. Competitive pressure also continued to increase in the electrical and electronics industry. In the automotive sector, on the other hand, far fewer companies assess their position as more negative than in the previous month. The share was halved from 33.0 to 16.1 per cent.
In July, one in four German industrial firms reported declining global competitiveness, mainly due to high energy costs, regulation, and poor investment conditions, according to an ifo survey. Mechanical engineering was hit hardest, while the automotive sector saw some improvement. Competitiveness within the EU also showed little recovery.
'German industry continues to face huge challenges in international competition,' explained Wohlrabe. 'Following the provisional agreement in the tariff dispute, German companies have to live with a structural surcharge of 15 per cent compared to competitors in the US. It is still unclear whether new trade relations can offset this.'
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