Anita Woelfel, an expert at the institute, explained that the main reason is weak demand, noting that the backlog of orders since the beginning of 2021 has been dealt with, but the new orders are not sufficient to fully exploit the factories’ capabilities.
“The sector is stuck in a combination of radical transformation, intense competition, and a weak economy,” Woelfel added, which is affecting the labor market, as many companies are holding back on hiring new employees or discussing writing off. Jobs.
However, the export expectations index saw an unexpected improvement, rising by 12.1 points to reach minus 19.2 points.
Volfel indicated that companies are awaiting developments in trade policy, with exporters benefiting from the high exchange rate Dollar after American elections.
The case of the German automobile sector
to attest German automobile sector There has been a noticeable decline in production, falling by 25 percent since 2018, as a result of declining demand in key markets such as China and rising local production costs.
Companies also face challenges in converting to… Electric carsWith the decline in demand for these vehicles, thousands of jobs have been eliminated in recent years.
In addition, German automakers are experiencing intense competition from Chinese companies, which offer electric cars at competitive prices, increasing pressure on German companies to accelerate their shift towards electric mobility.
Also, the rise in energy and labor costs Germany It increases the challenges facing this sector.
In this context, companies such as Volkswagen lowered their financial forecasts for 2024, citing a difficult market environment and declining demand for cars.
The company also announced plans to close some of its factories in Germany, threatening thousands of jobs, which exposed it to warning strikes early this week.
