More German industrial companies looking to invest abroad

More than 40 percent of German industrial companies are looking to invest abroad as cutting costs has become an increasingly pressing issue, the German Chamber of Commerce and Industry (DIHK) said on Tuesday.

One out of every three companies with investment plans abroad cited “cost savings” as their main motive. “Such a high value was last seen in 2008,” Ilja Nothnagel, a member of the DIHK executive board, warned.

Among smaller companies, the share was almost as high as back in 2004, when Germany was frequently described as the “sick man of Europe,” Nothnagel stressed. “Unfortunately, this is a reaction to the deteriorating economic conditions in the country,” he said.

At the end of last year, the government announced price measures to “massively reduce electricity costs for the manufacturing industry.”

Despite state aid, the cost situation remains critical for many sectors. The country’s pivotal car industry, for example, saw January production drop 7.6 percent within a month, according to industry figures.

“More and more companies consider Germany to be uncompetitive internationally, which is no good evidence of German industrial policy,” Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), warned last month.

In addition, many sectors are plagued by a lack of personnel. While employment continued to increase at the beginning of the year, the severe shortage of skilled workers had a “negative impact on the general provision of public services, as well as the economy and overall growth,” the Verdi trade union said.

Nothnagel emphasized that urgent action is needed in Germany as high energy prices and labor costs, a shortage of skilled workers, as well as the increasing bureaucracy, are causing difficulties for companies.

“A course correction is the need of the hour before the industrial structure in Germany is sustainably weakened,” he added.