Slight slowdown in growth in the electrical and digital industry
Nominal sales in the sector reached another record high last year at 242 billion euros.
Overall, 2023 was a positive year for the German electrical and digital industry. This result was stated by ZVEI President Dr Gunther Kegel. For the third time in a row, real, price-adjusted production increased by 1.4 percent based on data up to and including November. The industry has thus proven to be robust despite a challenging environment.
Once again, the sector, which is heterogeneous in terms of its composition, developed unevenly. The strongest growth in production was recorded by batteries (+7%), followed by electronic components (+6%), energy technology (+4%) and automation (+3%). Consumer durables, on the other hand, recorded a significant decline (- 13%). “It is pleasing that employment increased once again”, says Kegel. In Germany alone, the sector recently employed 910,000 people (+12,000 compared to 2022).
The electrical and digital industry is more globally positioned than almost any other sector. Exports (including re-exports) also increased again in 2023, by four percent to 256 billion euros. More than half - 133 billion euros - remained in the European Union.
Commitment to Germany as a business location
“In view of growing geopolitical tensions, the European single market is becoming increasingly important”, explains the ZVEI President. “If the EU wants to continue to play an independent role between the USA and China, it must orientate the internal market more consistently towards growth and refrain from non-industry regulation such as the EU Supply Chain Act. The next EU Commission must stop the regulatory tsunami and a bureaucracy that has been virtually unleashed in some areas and is weakening the competitiveness of companies. “We now need a European Union that focusses on industrial value creation”, demands Kegel. The ZVEI President clearly rejects a “dexit”: “Anyone who thinks that Germany could do better on its own reveals a dangerous lack of economic policy knowledge.”
In view of the current difficult economic environment with inflation, comparatively high interest rates and high energy prices, the ZVEI is cautious about 2024. Dr Kegel: “The industry is facing a dip in growth. Over the course of the year, we expect real production to fall by two percent.”
A recent ZVEI member survey shows that companies in the electrical and digital industry remain firmly committed to Germany and Europe as an industrial location. Four out of five companies state that they prefer to invest in their own country. For more than half of them, Europe is an attractive investment location, but China is equally so. Overall, 60 percent of companies want to increase their investment activity worldwide, although all companies rate the current geopolitical and political situation as uncertain.
“Companies want to continue to take advantage of the opportunities that arise in this phase of industrial transformation”, explains Kegel, pointing out that the megatrends of electrification, digitalisation and automation remain intact. “We are the only major sector in the manufacturing industry where real production is now higher than before coronavirus.”
Germany must remain a cosmopolitan country
The Association of the Electrical and Digital Industry is in favour of democracy and a liberal, open society. The ZVEI firmly rejects racism, anti-Semitism, xenophobia and every facet of right-wing ideology. It recognises far-right movements as the greatest threat to the democratic order, freedom and Germany's reputation in the world. Kegel: “Right-wing extremist parties damage the business location and thus prosperity. This also applies to the AFD.”
It is good that the centre of society is taking a stand against right-wing extremism. The political parties must follow suit and quickly present convincing political solutions to the challenges that have led to the rise of right-wing extremism. The ZVEI appeals to citizens to oppose right-wing extremism by voting in elections. The ZVEI will be organising its own campaign to motivate people to vote in the European elections.