Ifo: German industry gloomy on prospects for future competitiveness

German industry is increasingly pessimistic about its future competitiveness, according to a survey released on Wednesday by the country's influential ifo Institute after a slew of unpromising forecasts and concerns about the economy.

The competitiveness of German industry has "deteriorated more than ever before since the survey began in 1994," said ifo expert Stefan Sauer, based on the assessment of some 2,000 industrial companies surveyed by the institute.

While the assessments of Italian and French industrial companies are above the EU average, "Germany is at the bottom of the list, together with Belgium, Austria and Finland," the economists said.

The very negative assessment extends across all industrial sectors, particularly with regard to exports.

The development in energy-intensive industrial sectors is striking, they noted.

"The analysis makes it clear that the advantages of German industry in international markets are increasingly dwindling," Sauer said.

Alongside Germany's higher energy prices, the companies cited high levels of bureaucracy, more expensive preliminary products and taxes as the main reasons for their gloom.

Industrial production in Germany has fallen by 12% since 2018. New orders remain weak, capacity utilization continues to fall and equipment investments have been declining for the past four quarters.

The survey results come a day after the German Bundesbank central bank damped any optimism about the country's economic growth in its November monthly report.

Although preliminary data indicated that German gross domestic product grew by a surprising 0.2% from July to September, the Bundesbank said there was little evidence of an improved underlying economy or a trend toward growth.