Adrian, chairman of the German Chamber of Commerce and Industry, believes that there is no sign of a broad recovery in the German economy. Above all, energy policy and bureaucracy make these companies uncomfortable.
The German Chamber of Commerce and Industry (DIHK) believes that there is great uncertainty in the German economy, and there is currently no sign of a full recovery in Germany. DIHK chairman Peter Adrian told dpa: “Germany is in recession. We are one of the few countries in Europe where economic output is back below pre-coronavirus levels. This is a warning sign .”
Business associations such as DIHK have long pressed politicians for more growth drivers, such as a tax push, as well as faster planning and approval processes and less bureaucracy.
Overall difficult economic situation in Germany
Economists talk of a technical recession if gross domestic product shrinks for two consecutive quarters. This is the case for the last quarter of 2022 and the first quarter of 2023. Inflation also remains high. However, experts expect prices to gradually ease. Adrian said that the overall situation of the German economy is difficult.
Sometimes the mood is very bad, especially in mid-sized businesses. “People are very reluctant to invest. Right now, our investment in equipment is stuck at pre-COVID levels in 2019. In fact, we should have a clear urge now that COVID-19 is over. Worryingly, this This effect has not yet come.” But it has been achieved. ”
to people
Peter Adrian, born in 1957, has been Chairman of the German Chamber of Industry and Commerce since the beginning of 2023. Adrian also leads the Triwo group of companies whose activities include testing, validation and development processes for the real estate, airport and automotive industries.
‘No signs of a broad pick-up’
What are the prospects? “There’s still no sign of a broad pick-up,” Adrian said. “In the second half of this year, we may experience a sharp decline in the construction industry.” The chairman of DIHK said that rising interest rates and expensive construction materials will have a negative impact on the entire economy. “First of all, the economy is going downhill.”
The association’s president doesn’t want to risk predicting when things will turn bad again. “We’d probably be happy if we saw zero growth at the end of the year instead of negative.” At best, that means stagnation. Adrian said “tremendous progress” was needed to ensure prosperity.
companies are worried
While businesses have plenty of money, they spend too little. The chairman of DIHK said the uncertainty was “very large”. “Given Germany’s high costs and sometimes conflicting regulations, a large part of our economy lacks confidence that investments will pay off.”
Adrian cites the energy transition as an example of uncertainty: what role will natural gas still play as a bridge technology until CO2-free energy supplies emerge? “So far, we don’t have any green hydrogen. And we don’t have businesses that can use its green electricity reliably and cheaply.”
Complaints about “bureaucratic obstacles”
The economy also complains about “bureaucratic hurdles”: “I can confirm this from my own experience,” said Adrian, who runs a company himself. “Dealing with regulations, filings, notifications and reporting obligations takes up the majority of my time.” At his company, he has to use considerable capacity to navigate complex processes. This leaves no time for “creative research on new solutions and entrepreneurial concepts”.
Adrian asked the politicians to calm things down now. “We are currently faced with a situation in which a company is constantly confronted with new regulations, legal provisions, measures and laws from Brussels, Berlin or the federal states.”
German companies increase overseas investment
The president of the association said Germany was in danger of falling further behind internationally and was already at the bottom of the EU in terms of growth. According to a DIHK survey in April, one-third of companies investing overseas mainly do so to save costs. This is the highest value in 15 years.
Relatively high energy, labor and tax costs affect the competitive position of local companies. “Through our foreign chambers of commerce, we notice a high demand from the non-European regions of North America, South America and Asia.” German companies are active globally, which often strengthens their domestic headquarters.
For cost reasons, more and more German companies are now investing in other countries. In the long run, this will lead to a gradual shift: “Of course, this has an impact on employment in Germany,” says Adrian. “Because here we may permanently lose the sector.”