"Germany has lost ground", summarizes BDI President Siegfried Russwurm the situation of German industry at the press conference at the Hannover Messe. "Despite moderate recovery prospects, we must not delude ourselves: Overall, production figures have been showing a worrying downward trend for years," said the BDI President. After a drop in industrial production of 1.5% last year, the industry association expects a black zero over the course of the year. However, foreign trade, one of the most important growth drivers of the German economy, is not expected to provide any positive impetus this year.

"We are more of a follower than a driver," says Russwurm, describing Germany's role on the international market. While the global economy is expected to grow by around 3% this year, Germany will probably only achieve a weak growth impulse with an increase of 0.3%. The positive development of the DAX should not be allowed to obscure the situation in Germany: "German companies are currently achieving stronger growth and pleasingly good profits primarily at their production sites abroad," says Russwurm. This is a sign that German companies are internationally competitive, just not in Germany - a clear indication that the framework conditions in Germany are not right. He called on politicians in Germany and Europe to press ahead with urgently needed reforms. The BDI President mentioned three specific points: energy prices that can be planned for the long term, a reduction in bureaucracy and a competitive corporate tax concept.

ZVEI: Positive mood in the electrical and digital industry

ZVEI President Gunther Kegel

© WEKA Trade Media

The ZVEI also sees a challenging year. "We have carried the weak economic phase from the second half of 2023 into the new year, and incoming orders remain weak at the start of the year," said ZVEI President Dr. Gunther Kegel at the association's press conference. However, he sees an initial ray of hope in business with China, the largest customer country for the German electrical and digital industry. "Exports have increased by over 14% in the first two months. That makes us optimistic for the time ahead." Overall, industry exports fell slightly by -0.8% in the first two months of the year.

Kegel emphasized the willingness of the electrical and digital industry to innovate. Never before has so much been invested in R&D as today: "While this increased by 150% to a good 22 billion euros between 1990 and 2021, the cumulative growth in other investment expenditure here was only 10%. This very different development illustrates once again where the electrical and digital industry is focusing its investments - namely where innovation and technological progress and therefore the future are concerned," said Kegel.

The ZVEI President also used the press conference to present the eMonitor, which measures the degree of electrification across the individual sectors in Germany. In the course of this, Kegel emphasized the potential of electrification as a lever on the way to a climate-neutral future. However, three steps are necessary to achieve this: 1. electrification, 2. automation, 3. digitalization. The technologies developed in Germany and on display at the Hannover Messe show that an energy transition is possible.

VDMA: No reason for doomsday debates

Karl Haeusgen, VDMA President

© VDMA/Aichinger

"Debates about doom and gloom are out of place!" This is how VDMA President Karl Haeusgen started the association's press conference. Overall, the mostly medium-sized companies in the mechanical and plant engineering sector are in a very robust position and also have strong ties to their domestic locations. "However, the current economic policy lacks a passion for freedom. And what really worries us is the growing right-wing populism in Germany and Europe, which is calling for isolationism instead of open borders and free trade," warned Haeusgen. "This is calling into question the entire success model of Europe and therefore also of industry."

Nevertheless, the VDMA President also called for reforms instead of doomsday debates in order to strengthen Germany and Europe as industrial locations: "The economic and political environment is currently more challenging than ever before, partly due to the many geo-economic uncertainties. But the mechanical and plant engineering sector has the confidence and innovative strength to overcome these challenges."

In the first two months of the current year, the production of machinery and equipment in Germany fell by 4.2%. However, a more significant decline was avoided. In many companies, production continues to be buffered by high, albeit decreasing, order backlogs. In the first two months of the year, incoming orders were a cumulative 10% below the previous year's figure in real terms. "The negative factors are still noticeable. In particular, the great uncertainty among our customers is preventing more investment and therefore more orders for the mechanical and plant engineering sector. However, the bottom seems to have been reached, at least in terms of foreign orders," said Haeusgen. For this reason, the VDMA is sticking to its production forecast: in 2024, production in the mechanical and plant engineering sector will fall by 4% in real terms compared to the previous year.