BERLIN, Feb. 6 (Xinhua) -- German industry received 5.9 percent fewer orders in 2023 than in the previous year, according to provisional data published by the Federal Statistical Office (Destatis) on Tuesday.
Incoming orders in the automotive industry, the largest in Germany, fell by 4.5 percent. Meanwhile, the country's second-largest industry, mechanical engineering, recorded a slump of 11.9 percent.
In the current year, the mechanical engineering industry's business is expected to be "still significantly burdened," Ralph Wiechers, chief economist of the German Mechanical Engineering Industry Association (VDMA), said last week.
"We simply need a better mood, which will then be reflected in incoming orders and possibly also in sales in the second half of the year at the earliest."
The German Association of the Automotive Industry (VDA) is expecting domestic car production to "move sideways this year," with 4.1 million cars produced as in 2023. "The reason is, among other things, the overall economic weakness," said the VDA at the end of last month.
"In the past year we have not made any significant progress in many important areas like competitive energy prices, a competitive tax system, reducing bureaucracy," warned VDA president Hildegard Mueller, stressing that Germany should "become the engine of Europe again."
Due to high energy costs and rising labor costs, Germany's industry is becoming increasingly concerned about the country's international competitiveness as a business location.
According to a recent survey by consulting firm Deloitte and the Federation of German Industries, one in three manufacturing companies is already planning or considering relocating its production abroad.
The German government has recognized the danger of deindustrialization and it is sticking to measures to reduce energy costs for industry.
A reduction in the electricity tax to the European minimum of 0.05 cents per kilowatt hour is expected to save companies 3 billion euros (3.2 billion U.S. dollars). In addition, existing subsidies for particularly energy-intensive and highly competitive companies have been extended.
"With this decision, we are relying on a market-based solution with all its advantages," said Minister of Finance Christian Lindner when presenting the government's agreement on the 2024 budget at the end of last year. (1 euro = 1.07 U.S. dollar)
