German exporters have lost significant positions in global markets since 2021. This is discussed in the latest monthly report of the central bank of Germany.
According to Bundesbank economists, more than three quarters of the loss of export market shares between 2021 and 2023 was caused by a deterioration in the competitiveness of German exporters, which declined in many sectors. According to the authors of the report, this indicates fundamental structural problems in the national economy, which burden many companies. These include demographic changes, a shortage of skilled workers, rising labor costs, and increased bureaucratic procedures.
The largest contribution to the decline in the competitiveness of German exports was made by mechanical engineering, the electrical industry and energy-intensive sectors such as chemicals.
The COVID-19 pandemic and the full-scale invasion of Ukraine by the Russian Federation disrupted supply chains and caused an increase in energy prices, which created an additional burden on exports of energy-intensive sectors of the German economy.
Bundesbank economists point out that Germany is now lagging behind other developed economies. In addition, China is increasingly becoming a competitor for German companies.
The authors of the report add that such trends have not been observed in previous years.
Another factor in the loss of market share was weak global demand for products that dominate Germany's export structure, especially for automotive and aerospace technologies.
The Bundesbank notes the need for urgent action. We are talking about creating a reliable system to promote employment and investment, in particular, reducing barriers for skilled migrants, reducing bureaucratic procedures and expanding tax incentives for private investment.
