Survey in mechanical and plant engineering: Cost optimization instead of investments endangers the future

Frankfurt am Main – Mechanical and plant engineering is in a tense economic situation. The order situation is current and low with a view to the next twelve months. The level of investment, which is already too low, is falling, measures for climate neutrality are not being taken to a sufficient extent and relocations are still on the agenda. This is the result of the “Trendmelder 2024”, an industry-wide works council survey by IG Metall. The union is calling for a change of course – and support from politicians.

“The survey reveals massive deficits in the industry and shows that too many companies still have not understood the signs of the times. Restructuring, reductions and relocations are not concepts for the future,” warns Jürgen Kerner, second chairman of IG Metall. “Mechanical and plant engineering can and must be a driver of green transformation and digitalization in industry – in Germany and beyond. Without innovative machines and systems, networked factories with digital production processes cannot be realized. Without energy-efficient machines that process as few raw materials as possible, the climate and sustainability goals cannot be achieved. Without technological solutions in mechanical and plant engineering, the development of a circular economy cannot be realized.” This is a huge opportunity for the industry. That’s why companies now have to invest countercyclically. “The profits made in good economic times must be used to resolve the investment backlog – also with a view to climate neutrality,” demands Kerner. Politicians are also asked: “The federal and state governments must support and accompany the transition to climate-neutral mechanical and plant engineering.”

Investments continue to fall at a low level

According to the survey, however, there is no evidence of an investment offensive in the industry – on the contrary: the expected development of investments and investments in research and development is at the level of 2020. 13 percent of companies plan to increase investments, 32 percent expect them to decrease investments. In 55 percent of the companies they remain at a level that only 24 percent of those surveyed describe the investment situation as very good or fairly good.

When it comes to switching to climate neutrality, companies still have a lot of catching up to do. Only 23 percent state that climate neutrality goals have been formulated at their location. This is partly the case for 29 percent, 14 percent are planning to formulate goals, but 29 percent have not yet addressed this topic at all.

Incoming orders are at a low level

Overall, the situation in the industry is tense: Only 34 percent of the works councils surveyed rated the current order situation as very good or fairly good. 23 percent expect incoming orders to continue to fall in the next twelve months, while 44 percent expect incoming orders to remain the same. 16 percent expect incoming orders to increase. Nevertheless, there is still potential for investment. At least 37 percent still rate the profits as very good or fairly good. 24 percent expect profits to fall in the next twelve months, 43 percent expect them to remain the same and 14 percent expect them to increase. 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, and in a further 10 percent it is planned.

The need for skilled workers continues to increase

22 percent of those surveyed expect their permanent workforce to decline in the next twelve months. 35 percent of temporary workers and 29 percent of temporary workers expect a reduction. The number of trainees remains at a low level. Despite the tense situation for skilled workers, only 20 percent are offering more training positions. Qualified personnel planning is still missing in 88 percent of companies. “The companies increased their need for skilled workers through their own wrong decisions,” warns Jürgen Kerner.

Politics must support the industry

In order to secure jobs and locations in Germany’s industry with the highest employment, IG Metall is convinced that politicians must also provide greater support for Germany as an industrial location, its climate-neutral conversion and its works councils. Mechanical and plant engineering and its products form the foundation for the climate-neutral transformation of industry, but this foundation must be secured politically in view of the current economic situation. To this end, IG Metall and works councils in the industry have developed a position paper in which they address five demands to the federal government:

Independent European value creation must be strengthened by supporting domestic value chains in future funding.
Locations and employment must be strengthened by ensuring that state-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 procedures.
Infrastructure and services of general interest must be supported more by public investments. This requires the abolition of the debt brake.
Training and qualification must be improved through a training place levy, improved funding for further training and increased measures to increase the attractiveness of the industry.

To the complete Position paper

The trend reporter is a survey of works council members in mechanical and plant engineering that has been carried out annually in spring by IG Metall since 2017. It captures their view of the industry. This year it was expanded to include questions about the climate neutrality of products and production. More than 620 works council members took part in the current survey from January 8th to February 2nd, 2024.

To the Survey results

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