Massive job losses in industry cause significant economic implications
The German metal and electronics industry is currently facing a deep crisis, with little improvement expected by 2025, according to a survey conducted by the industry association, Gesamtmetall. The survey involved 1,785 companies, representing about a quarter of all member companies in the metal and electronics industry.
The economic situation is so dire that around 3.82 million people working in the industry have lost 154,000 jobs since 2023, with an additional 76,000 jobs lost in the first half of 2023 alone. This has resulted in a loss of more than 25 billion euros in economic power compared to 2019.
The industry association cites high energy costs, taxes, social security contributions, and bureaucracy as major cost problems. Lars Kroemer, the chief economist of Gesamtmetall, made these statements, while the assessment of the situation was made by the managing director of Gesamtmetall, Oliver Zander.
The causes of these job losses and economic challenges are largely homegrown, according to Zander. He also stated that half of the companies plan to reduce investments in Germany, by up to 30%.
The global economic slowdown and weaker demand, supply chain disruptions, rising raw material and energy costs, increasing competition from low-cost producers abroad, structural changes towards electrification, digitization, and automation, and geopolitical tensions and regulatory challenges are some of the primary reasons for these challenges.
The impact of these job cuts on Germany’s economy is significant because the metal and electronics sector is a key part of Germany’s industrial base and export strength. Job losses can lead to lower domestic demand, reduced tax revenue, and social challenges in affected regions. It may also slow technological innovation and competitiveness if firms cut back on investment and R&D.
It is worth noting that the source of the information is ntv.de, jki/dpa. For the most up-to-date and specific data on Gesamtmetall’s recent reports, checking official Gesamtmetall publications or reputable German economic news sources would be necessary. Global economic pressures, such as US trade policy, are also contributing factors to the job losses in the industry. In a survey conducted by Gesamtmetall at the beginning of the year, 51% of participating companies rated the situation as poor. In June 2023 alone, the industry lost almost 14,000 jobs.
The employment policy of the German metal and electronics industry, heavily influenced by the industry's current crisis, is under intense scrutiny for possible interventions to minimize job losses and financial consequences, considering the community policy implications. The ongoing crisis, characterized by costs such as high energy costs, taxes, social security contributions, and bureaucracy, has impacted the broader finance and business sectors, given the importance of the metal and electronics industry to Germany's economy.
