Germany's Industrial Core Is Collapsing As PwC Warns Of "Decisive Year"

Katherina Reiche's debt package aims to stimulate Germany's economy, but the machinery sector faces accelerating decline, according to PwC. The sector's production slump exceeds 22% since pre-Covid times, with capacity utilization at a five-year low. Rising costs, regulations, and weakening export demand worsen the situation, leading to expected sales declines. Industry experts predict a decisive year for machinery and plant engineering due to government troubles and geopolitical conflicts. Bankruptcies have increased, leading to job losses, and more are anticipated if recovery fails. The government's actions are deemed inadequate, with internal disputes and Brussels-driven climate policies hindering progress. Investors are relocating due to Germany's high costs and regulatory burden, seeking investment opportunities in other countries. The proposed industrial electricity price cap is seen as insufficient, tied to climate-friendly production. The machinery sector's decline signals a broader economic depression threatening social insurance funds and societal stability. An eco-socialist policy is blamed for the crisis, potentially triggering social upheaval.