Numerous structural challenges
Quite apart from cyclical developments, the German industry is faced with
numerous structural challenges. “Industry 4.0” is certainly an important topic for
companies, but the management boards differ in their approach. In fact, the
issue is still quite abstract. However, companies are focussing on different
aspects when trying to grasp the actual, real-life implications of the “Industry
4.0”. An increased digitalisation and automation of the value chain, the creation
of digital connections between machines and materials and the role of artificial
intelligence in R&D or production processes may threaten business models
which are still working quite well today. However, many developments will only
manifest themselves gradually.
In the short run, the lack of qualified labour is the main challenge. Depending on
the region and the individual sector, it becomes more and more obvious. The
DIHK survey mentioned above showed that companies regard a lack of qualified
labour as by far the most important risk for their business. In fact, this issue has
clearly become ever more important during the last few years. The lack of
qualified labour will have an impact on short-term growth, too, as companies
would be able to process their orders more quickly if more labour was available.
Labour costs are the second most important challenge, according to the DIHK
survey. However, this is obviously always an issue; labour costs have been
mentioned for some years now as a challenge. Energy or power-intensive
industries in particular also regard the energy price development as a key
business risk.
Overall, the economic framework conditions for the German industry look set to
remain quite favourable in 2018, even though the pace of growth is likely to slow
somewhat during the year. Structural issues such as the lack of qualified labour
dampen the favourable overall picture. There are no quick solutions in sight. If
the economic and geopolitical risks continue to leave the “real economy”
unscathed, it is likely that manufacturing output will continue to rise in 2019, too.
EU Forecast
euf:ba18h:153/nws-01