Bavaria Facing Growing Danger of De-industrialization

Thu 27th Jul, 2023

Bavaria is facing a growing danger of de-industrialization, as more and more domestic industrial companies prefer to invest abroad rather than at home. According to a survey of 900 Bavarian industrial companies by the Bavarian Chamber of Industry and Commerce (BIHK), the intentions for domestic investments are currently well below the long-term average. The opposite picture emerges for foreign investments.

"The investment balance for the country falls by 6 points to a level that we have only known from times of crisis," says BIHK Managing Director Manfred Gößl. In contrast, foreign investments are close to record highs with a balance of 19 points. The balance is the difference between the percentages of the answers "more investment" and "less investment".

The investment motives surveyed also indicate skepticism about the location. "Capacity expansions take place predominantly abroad. They are the motive for 59 percent of foreign investments, but only for 31 percent of domestic investments. In domestic investments, on the other hand, 'energy efficiency/environmental protection' is playing an increasingly important role, while other motives such as 'product innovation' and even 'replacement purchases' are steadily losing importance in a long-term comparison. If too little is invested in innovations and expansions in our Bavarian industrial locations, this means that the domestic industrial substance is consumed in the long term. 1.3 million well-paid jobs depend on it in the Free State," said the BIHK boss.

"Politicians must act as quickly as possible in order to give industry and especially medium-sized companies a future with us again," emphasizes Gößl. These include, first and foremost, internationally competitive energy prices, tax measures for more investment and more employment, and the clear goal to create the fastest administration and the fastest expansion of infrastructures in Europe - whether housing, energy, telecommunications or transport.


Article translated from IHK article

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