The President of the German Chamber of Industry and Commerce, Adrian, sees no signs of a broad economic upswing in Germany. Above all, the energy policy and the bureaucracy unsettled the companies.
The German Chamber of Industry and Commerce (DIHK) sees great uncertainty in the German economy and no signs of a broad upswing in Germany for the time being. DIHK President Peter Adrian told the dpa news agency: “Germany is in a recession. We are one of the few countries in Europe whose economic output is back below the pre-corona level. That is an alarm signal.”
Business associations such as the DIHK have long been demanding more growth impulses from politicians, for example of a tax nature – as well as more speed in planning and approval processes and less bureaucracy.
The situation of the German economy is difficult overall
If gross domestic product shrinks for two quarters in a row, economists speak of a technical recession. This was the case in the last quarter of 2022 and the first quarter of 2023. Inflation is also still at a high level. However, experts are expecting a gradual relaxation in prices. According to Adrian, the situation in the German economy is difficult overall.
The mood is sometimes very bad, especially among medium-sized companies. “There is a great reluctance to invest. At the moment, we are still very much at the level of investments in equipment before Corona 2019. Actually, we should experience a clear impulse because Corona is over. It is worrying that this effect has not yet materialised.”
To person
Peter Adrian, born in 1957, has been President of the German Chamber of Commerce and Industry since the beginning of 2023. Adrian also leads the Triwo group of companies, whose businesses include real estate, aerodromes and test, verification and development processes in the automotive industry.
“There are no signs of a broad upswing”
And the prospects? “There are still no signs of a broad upswing,” says Adrian. “We will probably experience a massive slump in the construction industry in the second half of the year.” Increased interest rates and expensive building materials would have negative consequences for the entire economy, according to the DIHK President. “First of all, the economy is going downhill.”
The president of the association does not want to venture a forecast as to when things will go uphill again. “We can probably be happy if we see zero economic growth at the end of the year and not a minus.” At best, that means stagnation. In order to ensure prosperity, “enormous progress” would be needed, according to Adrian.
The companies are worried
Although companies have enough money, too little is invested. The uncertainty is “very great,” says the DIHK President. “Large parts of our economy lack confidence that investments will pay off in view of the high costs and sometimes even contradictory regulations in Germany.”
Adrian cited the energy transition as an example of the uncertainty: What role will gas still play as a transitional technology until there is a CO2-free energy supply? “So far we have not had any green hydrogen. We also have no green electricity in such a way that companies can use it reliably and cheaply.”
Complaints about “bureaucratic obstacles”
The economy also complains about “bureaucratic obstacles”: “I can confirm that from my own experience,” says Adrian, who runs a company himself. “Dealing with regulations, applications, notifications and reporting obligations is what takes up most of my time.” In his company, he has to use considerable capacity to work through complex processes. There is then no time to “work creatively on new solutions and entrepreneurial concepts”.
Politicians should now let things calm down, Adrian demands. “At the moment we have the situation that a company is constantly being confronted with new regulations, legal provisions, measures and laws from Brussels, from Berlin or from the federal states.”
German companies are investing more abroad
According to the president of the association, Germany is in danger of falling further behind internationally and is already among the bottom ranks in terms of growth in the EU. According to DIHK survey from April every third company that invests abroad wants to save costs in particular. That is the highest value in 15 years.
Comparatively high energy, labor and tax costs weighed on the competitive position of local companies. “Through our foreign chambers of commerce, we are noticing a high level of demand at non-European locations in North America, South America and Asia.” German companies are active worldwide and that usually strengthens them at their headquarters at home.
For cost reasons, significantly 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 jobs in Germany,” says Adrian. “Because here we can lose sectors permanently.”