Bavarian employers' association fears more unemployment in the metal and electrical industries

Bavarian employers' association fears more unemployment in the metal and electrical industries

According to a report by www.maschinenmarkt.vogel.de,

The situation in the Bavarian metal and electrical industry deteriorated in the second half of 2023, expectations for the coming months and companies' employment plans are negative. The business situation in the Bavarian metal and electrical industry has noticeably worsened. In addition, fewer and fewer orders are being added. On balance, this causes companies' business expectations to slip into the red. The simmering budget crisis, high costs, especially for energy and labor, and excessive bureaucracy are unsettling companies. The investment plans of M+E companies have fallen further and are deeper into negative territory. Only 13 percent want to increase investments in the coming months. Two thirds of companies say that site conditions have worsened in the last 24 months. The employment plans of M+E companies are negative despite the ongoing massive shortage of workers and skilled workers. The balance has fallen from +14.2 to -5.1 points since the summer. "By the end of the year, companies will have created around 11,000 jobs. Next year we expect a decline in employment by around 5,000 people, so that by the end of 2024 there will be a good 873,000 people employed in the M+E industry," reports Brossardt.

The negative developments in the metal and electrical industries are expected to lead to increased unemployment. The reluctance to invest and the closure of production facilities in Bavaria could lead to a decline in employment in this sector. Companies could cut jobs and concentrate more on foreign locations, which could lead to an increase in the unemployment rate in Bavaria. The high burden of energy and labor costs as well as bureaucracy could also affect other industries in Bavaria, which could lead to a further increase in unemployment throughout the state. The uncertainty about local conditions has already led to a divergence between domestic and foreign production, and it is to be expected that this will have further negative effects on the employment situation in Bavaria.