A good one in three companies is planning to relocate investments abroad

In the survey, 85 percent of companies stated that they were heavily or even very heavily burdened by bureaucracy. It has already been one of the top burdens for companies in previous surveys, but the value has never been higher than in the current survey (May: 72 percent; February: 62 percent). Many companies complain that the effort required for reports that do not add value is increasing, tying up capacity and causing high costs. In addition, processes in public administration are often time-consuming and complicated, whereas simple and particularly digital solutions are missing.

Large majority heavily burdened by high electricity prices

Another result of the survey: Energy costs - especially for electricity - continue to be one of the central challenges for the automotive supply industry and medium-sized automotive companies in Germany. 71 percent of companies say they are heavily or even very heavily burdened by the high electricity price. The situation has eased slightly (May: 74 percent, February: 82 percent), but a good seven out of ten companies are still suffering from the high electricity price. 59 percent of companies are still severely or very severely challenged by gas prices (May: 59 percent, February: 73 percent).

Increasing focus on order situation

In addition, the order situation is increasingly coming into focus. While in May 42 percent of companies said that a lack of orders was currently only a minor or no challenge at all, only 22 percent said this in the current survey. In contrast, 41 percent said that a lack of orders represents a major or very major challenge (May: 2023: 31 percent, February 2023: 21 percent). This reflects the weak overall economic environment.

Tendency for investment relocations is solidifying

The survey also shows that companies' investment shifts are becoming more established: more than one in three companies (35 percent) are now planning to shift investments abroad (May 2023: 27 percent, February 2023: 27 percent, September 2022: 22 percent). Another 14 percent are planning to cut investments. Only 1 percent of companies stated that they wanted to increase their investments in Germany given the current situation. Relocation destinations are: other EU countries, Asia and North America (in that order).

„Germany must remain an industrial location“

Investment activity in Germany is primarily affected by the sales situation and sales expectations. 27 percent cited this as the greatest impact on investment activity. For 16 percent of companies it is energy prices and for 15 percent it is bureaucracy and the density of regulations that prevent them from investing in Germany.

At the same time, the survey results would confirm the need for action identified in the Federal Minister of Economics' industrial strategy. This action is necessary to support the transformation of industry and improve its strategic sovereignty and international competitiveness. According to Müller, it is all the more important that the findings are now followed by concrete actions and laws, also when it comes to competitive energy prices.

"It cannot just be a matter of declarations of intent; Berlin must finally take measures to reduce the price of electricity for industry and strengthen the international competitiveness of companies. “Germany must remain an industrial location," the VDA President stated.

Lack of labour force and skilled workers has less of an impact

For the coming year, one in four companies (25 percent) expects the situation to worsen compared to the current situation. In contrast, 16 percent expect their situation to improve. Around six out of ten (59 percent) expect a sideways movement with a view to 2024.

Against this background, the shortage of labour force in general and skilled workers seems less severe than before: Compared to the last survey in May of this year, the proportion of companies suffering from a shortage of skilled workers and workers has fallen to 71 percent (May: 85 percent, February: 78 percent). While in May 57 percent of companies were looking for employees for their locations in Germany, now the figure is 43 percent. Accordingly, in May 19 percent of companies planned to reduce employment in Germany whereas now this is stated by 40 percent of companies.

The survey was conducted from October 9th t o October 16th, 2023. 113 companies took part.