“In sales markets outside the EU [European Union], German manufacturers of machinery and equipment are facing fiercer competition, especially from China,” said Nicolas Bunde, industry expert at the institute. The survey score for competitiveness fell to minus 14.3 points in August, down from minus 7.3 in April.

This was its lowest level since collection of these figures started in July 1994, an ifo release said.

The last time the value fell to a similarly low level (minus 10.6) was during the financial crisis in January 2009. In the EU markets, competitiveness fell to minus 8.5 points; in the German domestic market, it slipped to minus 4.1.

A lack of suitable skilled workers and a shortage of important intermediate products often limit the manufacturing of machinery and equipment, some 40 per cent of the companies surveyed said.

“The shortage of skilled workers is a particular challenge in the machinery and equipment industry, which in Germany is dominated by medium-sized enterprises,” Bunde commented.

Many of the employees in production are older, while younger colleagues are rarely keen on shift work. In addition, manufacturers of machinery and equipment are located in rural areas. Here, companies must become even more attractive as employers if they want to attract suitable staff from the big cities.

Some companies have already moved their production abroad. But it is too early to speak of deindustrialization, the release added.

Fibre2Fashion News Desk (DS)