Job reductions in thousands affecting the metal and electrical sectors - Multitude of Positions in the Metal and Electrical Sector
In the heart of Europe, Germany's metal and electronics industry is grappling with a significant crisis, leading to substantial job losses. According to Gesamtmetall, the employers' association for the metal and electronics industry in Germany, over 154,000 jobs were lost in the first half of 2023 alone, with the total number of job cuts since the beginning of the year nearing 154,000.
The crisis is not limited to a specific month, but has been ongoing throughout the year. In June 2023, nearly 14,000 jobs were lost, reflecting the persistent nature of the problem. The job losses are affecting not only the industry but also the economy of Berlin and other parts of Germany.
Lars Kroemer, the chief economist for Gesamtmetall, attributes the job losses to a combination of domestic cost issues and global economic pressures. He emphasizes that each job cut results in a loss of over 100,000 euros in value creation. Since 2019, the total economic power loss due to job cuts in the metal and electronics industry is almost 25 billion euros, according to Kroemer.
The domestic cost issues include energy, taxes, social security contributions, and bureaucracy, which remain significant factors contributing to the ongoing job losses. The global economic pressures, including U.S. trade policy, also continue to impact Germany's metal and electronics industry.
The decline in orders and weakening demand in these sectors are primary factors contributing to the high job cuts. A significant plunge in factory orders for electronics-related products, lower demand for electrical equipment and basic metals, and declining machine tool orders and manufacturing output are all indicators of the broader challenges in the industries.
The German machine tool industry experienced a 10% drop in orders in early 2023 compared to the previous year, with domestic orders down by 30%. This reduction in production has led to layoffs. The overall contraction in manufacturing activity in the Eurozone, with Germany hit hardest, is another factor contributing to the job losses.
To strengthen competitiveness in the metal and electronics industry, a strong "reform agenda" is needed, as suggested by Kroemer. This could involve addressing the domestic cost issues and navigating the global economic pressures more effectively. The rise of digitalization and automation also plays a role, as firms optimize operations and reduce workforce size.
Despite the challenges, the metal and electronics industry in Germany currently employs approximately 3.82 million people, a decrease of 104,000 from the previous year. The industry remains a significant contributor to the German economy, and efforts to address the ongoing crisis are crucial for its future.
- With the metal and electronics industry in Germany grappling with significant job losses, it's essential to implement comprehensive community policies, focusing on vocational training to upskill and retrain displaced workers, ensuring a smoother transition into new or similar roles within the industry.
- To combat the ongoing job losses and restore the industry's competitiveness, targeted efforts could be made in various sectors, such as manufacturing, aerospace, and business, with an emphasis on industry-specific vocational training programs that can help build a more adaptable workforce capable of navigating the challenges posed by global economic pressures and digitalization.
- Additionally, addressing key factors contributing to the domestic cost issues in the industry, like energy, finance, and bureaucracy, by implementing policies that reduce energy costs, offer competitive tax rates, and streamline regulations might help retain jobs and attract new investment in the field, boosting the overall economic health of Berlin and other parts of Germany.
