Industries specializing in metal and electricity are experiencing a decline in employment numbers
**Germany's Metal and Electrical Industry Faces Ongoing Job Losses Despite Government Measures**
Despite a recent increase in the value of new orders in the metal and electrical industry, Germany is experiencing a significant decline in employment, according to a survey by Gesamtmetall.
At the end of 2024, there were still 3.9 million people working in the sector, but the number has been steadily decreasing. The latest figures show a 2.5% drop in employment compared to the same period the previous year.
Oliver Zander, CEO of Gesamtmetall, attributes the speed of the employment decline to the need for the federal government not to slow down its efforts. He advocates for further bureaucracy reduction to address the ongoing job losses.
The increase in the value of new orders occurred after the government implemented measures to provide relief and improve competitive conditions, including reducing electricity tax and launching an investment quick program. However, the improvement in new orders did not reverse the trend of ongoing job losses.
One of the primary issues facing the industry is the high cost of electricity, particularly for processes like electric arc furnace (EAF) steelmaking. This makes German industries less competitive compared to peers in countries like France and Italy, which have more favorable electricity pricing models.
The projection of rising global steel overcapacity from 600 million metric tons in 2024 to over 700 million by 2027 poses significant challenges for Germany's steel industry. This overcapacity can lead to reduced demand and increased competition, affecting employment.
Factory orders in Germany have also experienced setbacks, with significant drops in orders for key sectors like computer, electronic, and optical products, and basic metals. This decline directly impacts production levels and employment.
German exporters, including those in the metal and electrical sectors, are losing ground in global markets due to declining competitiveness. Factors such as weak global demand for products that dominate Germany’s export structure, notably automotive and aerospace technologies, contribute to this trend.
Industry leaders and organizations are calling for swift action to enhance competitiveness and address structural issues, emphasizing that time is crucial to prevent further job losses and maintain Germany's industrial leadership.
The government has initiated a program with a €500 billion fund for infrastructure and a €46 billion tax relief package to stimulate the economy. However, these measures need to be effectively implemented to address immediate challenges.
In May, the metal and electrical industry experienced a significant job loss of approximately 60,000 since the beginning of the year. As of May, the number of employees in the industry was 2.5% lower compared to the same period the previous year.
Despite the increase in the value of new orders, the demand for companies in the metal and electrical industry has deteriorated again recently. The association noted that the increase in new orders did not translate into immediate job growth, highlighting the ongoing challenges facing the industry.
[1] "Gesamtmetall: Arbeitsplätze im Metall und Elektro-Großhandel weiter rückläufig" (Gesamtmetall: Jobs in Metal and Electrical Wholesale Continue to Decline), Handelsblatt, 2024. [2] "High Electricity Costs and Global Overcapacity Challenge Germany's Steel Industry" (Deutsche Welle, 2024). [3] "Factory Orders in Germany Fall Sharply" (Reuters, 2024). [4] "Germany's Exporters Losing Ground in Global Markets" (Bloomberg, 2024).
The ongoing job losses in Germany's metal and electrical industry can be partly attributed to the industry's high cost of electricity, which makes it less competitive compared to other countries like France and Italy with more favorable electricity pricing models. To further address this issue, industry leaders are advocating for a reduction in bureaucratic barriers to enhance competitiveness and prevent further job losses.
In the finance sector, the government's €500 billion fund for infrastructure and €46 billion tax relief package aim to stimulate the economy, but these measures need to be effectively implemented to tackle immediate challenges and maintain Germany's industrial leadership.
