Frankfurt am Main – The machinery and plant engineering sector is facing a challenging economic situation. The order book is currently low, and the outlook for the next twelve months is similarly bleak. The already too-low level of investment is declining, measures for climate neutrality are not being implemented to a sufficient extent, and relocations remain on the agenda. This is the result of the “Trendmelder 2024,” an industry-wide works council survey conducted by IG Metall. The union is calling for a change of course—and support from policymakers.
“The survey reveals massive shortcomings in the industry and shows that too many companies still haven’t grasped the signs of the times. Restructuring, layoffs, and relocations are not viable strategies for the future,” warns Jürgen Kerner, Second Chairman of IG Metall. “The mechanical and plant engineering sector can and must be a driver of the green transformation and digitalization in industry—in Germany and beyond. Without innovative machinery and equipment, connected factories with digital production processes cannot be realized. Without energy-efficient machinery that uses as few raw materials as possible, climate and sustainability goals cannot be achieved. Without technological solutions from the machinery and plant engineering sector, the establishment of a circular economy cannot be realized.” This, he says, is a huge opportunity for the industry. That is why companies must invest countercyclically now. “The profits generated during good economic times must be used to clear the investment backlog—including with regard to climate neutrality,” Kerner urges. Politicians also have a role to play: “The federal and state governments must support and facilitate the transition to climate-neutral mechanical and plant engineering.”
Investments Continue to Decline at a Low Level
According to the survey, however, there are no signs of an investment push in the industry—on the contrary: the expected trend in investments and investments in research and development remains at the 2020 level. Thirteen percent of companies plan to increase investments, while 32 percent expect investments to decline. For 55 percent of companies, investment levels will remain unchanged, with only 24 percent of respondents describing the investment situation as very good or somewhat good.
Companies still have significant ground to make up when it comes to the transition to climate neutrality. Only 23 percent report that climate neutrality goals have been established at their location. For 29 percent, this is partially the case; for 14 percent, the formulation of goals is in the planning stages; but 29 percent have not even addressed this issue yet.
New orders remain at a low level
Overall, the situation in the industry is tense: Only 34 percent of the works council members surveyed rated the current order situation as very good or somewhat good. Twenty-three percent expect order intake to continue declining over the next twelve months, while 44 percent anticipate it will remain stable. Sixteen percent expect order intake to rise. Nevertheless, there is still potential for investment. After all, 37 percent still rate profits as very good or somewhat good. 24 percent expect profits to decline over the next twelve months, 43 percent expect them to remain stable, and 14 percent expect them to rise. Employees are already feeling the effects of the order situation: In 35 percent of companies, working time accounts are being reduced, and 19 percent are on short-time work, with another 10 percent planning to implement it.
The shortage of skilled workers continues to worsen
Twenty-two percent of respondents expect their permanent workforce to shrink over the next twelve months. Thirty-five percent anticipate a reduction in the number of temporary employees, and 29 percent expect a decrease in the number of temporary agency workers. The number of apprentices remains at a low level. Despite the tight skilled-labor market, only 20 percent are offering more apprenticeship positions. Qualified workforce planning is still lacking in 88 percent of companies. “Companies have exacerbated their shortage of skilled workers through their own poor decisions,” warns Jürgen Kerner.
Politicians Must Support the Industry
IG Metall is convinced that, in order to secure jobs and locations in Germany’s largest employer sector, policymakers must also provide stronger support for Germany as an industrial hub, its transition to climate neutrality, and its works councils. With its products, the mechanical and plant engineering sector forms the foundation for the climate-neutral transformation of industry, but this foundation must be politically secured in light of the current economic situation. To this end, IG Metall and works council members from the sector have developed a position paper in which they present five demands to the federal government:
- Independent European value creation must be strengthened by ensuring that future funding also supports domestic value chains.
- Locations and employment must be strengthened by ensuring that government-funded research also contributes to strengthening domestic locations and jobs.
- The breadth of German industry must be promoted, and there needs to be easy access to research funding advice, simplified application procedures, and accelerated application, approval, and implementation processes.
- Infrastructure and public services must be more strongly supported through public investment. This requires the abolition of the debt brake.
- Training and skills development must be improved through an apprenticeship levy, enhanced support for continuing education, and strengthened measures to increase the sector’s appeal.
Read the full position paper
The Trendmelder is an annual survey of works council members in the machinery and plant engineering sector conducted by IG Metall every spring since 2017. It captures their perspective on the industry. This year, it was expanded to include questions on the climate neutrality of products and production. More than 620 works council members participated in the latest survey, which took place from January 8 to February 2, 2024.
Survey Results
