German fabricators support ‘SOS Industries’ campaign
Germany’s association of steel and metals fabricators, WSM, is supporting a nationwide campaign to raise awareness for the critical state of Germany’s industries, Kallanish understands.
The campaign is called Wirtschaftswarntag (SOS Industries), and has been organised by an alliance of more than 50 industries associations, mostly representing small and medium-sized enterprises. The campaign has set up a large rally at the Brandenburg Gate in Berlin on 29 January.
“The code for emergencies at sea, SOS, in this context stands for ‘Save our small and medium-sized enterprises’,“ says Christian Vietmeyer, managing director of WSM. He cautions that the campaign is not a mere test alarm. “We are already on the edge of tipping over,” he warns.
The main rally in Berlin will be preceded by regional campaigns all over Germany, often including regional metals working and construction associations. The Wirtschaftswarntag means to set a signal to political parties in the run-up to the new governmental elections in February.
“Our aim is to wake up the nation, so that the focus of the election campaigns and the of the new government will be a policy that leads Germany back to economic strength,” organisers state.
Christian Koehl Germany
German fabricator production continues to trend lower
The production volume of Germany’s steel and metals working industries from January through September was 7.2% lower than in the first nine months of 2023, according to industry federation WSM.
Order intake in the first seven months was down 12.8% y-on-y, amid the ongoing economic dip, WSM notes, while utilisation of production facilities was 76.3% in July, Kallanish notes.
September reported a 6.7% year-on-year decrease, a less sharp fall than July’s 10.8% y-o-y decrease.
In August a poll by economic research firm ifo Institute reported 43% of companies in the sector predicted a decline over the next six months from an already modest level of business activity. Half of the respondents expected business to remain flat.
By June, the industry workforce had reduced by 8,700 y-on-y, which is around 2.4% of the former workforce, Kallanish understands.
In early October, WSM reported that 41% of its members would have to lay off further staff.
The federation’s managing director, Christian Vietmeyer continues to call on policymakers to take action against a further industrial deterioration, with a focus on tackling uncompetitive power prices in Germany.
He conceded that the ongoing political situation was also more challenging, after collapse of the current government, with new elections projected for early 2025.
Christian Koehl Germany
Half of German fabricators need to reduce staff
Germany’s steel and metals fabricators’ federation warns of continued pessimism among companies amid the ongoing climate of slow growth, Kallanish notes.
In a recent poll by the federation on the business sentiment among its members, 41% of respondents said they plan to lay off personnel. This concerns mostly small and medium-sized enterprises (SMEs), many of them family-owned, with a large share of automotive suppliers.
Companies are suffering not only from low demand on the market but also from a high level of bureaucracy, which urgently needs to be cut back, says WSM managing director Christian Vietmeyer. One critical development underlined by WSM is the “unprecedented flexibility” in the call-offs of carmakers.
A similar picture has been drawn by credit insurer Atradius, which states revenues of steel and metal working companies dropped by 10% from January to April. According to Atradius, 32% of companies have introduced short working hours, which is way above the average for processing/manufacturing industries of 13%. Atradius also observes an increase in bankruptcies and fears that 10% of companies could disappear in the next five years.
SMEs are hit harder in times of recession, states Datev, an IT provider organised as a cooperative by and for tax consultants, auditors and lawyers. SMEs are mostly rooted regionally, and cannot easily translocate production sites to other countries. They also rely very much on established personnel that are loyal to the location, Datev notes.
Datev has carried out a study based on business figures submitted by several thousand companies across all sectors, which in future could work as an index for forecasts by economic research institutes. According to the study, revenue across all companies in August was 5% lower than in August 2023. “That’s what it really looks like; it is a view into the engine room,” says Datev chairman Robert Mayr.
Christian Koehl Germany
