BDI

The “classic” industrial job belonged to the previous century, wrote the President of the Federation of German Employers’ Associations, Rainer Dulger, in a guest article in the conservative “Frankfurter Allgemeine Zeitung” on Thursday. Of course, Industry President Siegfried Russwurm sees it very differently. In a press conference held on the same day, the industry lobby group BDI pointed out that the industrial base is the “core of the economy”. Around a quarter of German added value comes from industry.

The Federation of German Industries (BDI) is looking “with cautious confidence” at the economic recovery. For the export-oriented industry, much depends on the development of the world economy. The opening balance sheet by the green economics and climate minister Robert Habeck now also contributes to the confidence. “We are of the same opinion with Mr. Habeck on the description of the problem,” said the BDI President on Thursday in Berlin. Russwurm estimates the investment requirement in the next ten years at 860 billion euros, just for decarbonization.

This number is considered not to be set in stone. But a new study by the union-affiliated Institute for Macroeconomics and Business Cycle Research (IMK) comes to a similarly high funding requirement. The IMK believes that it is possible to finance the additional public investment requirements of 60 to 80 billion euros per year in accordance with the constitution.

However, that is not enough. The BDI refers, among other things, to the conversion of the factories to “green” hydrogen, for example. Industry also has a duty here. Salzgitter AG estimates three to four billion euros for the conversion of its iron and steel works in Salzgitter alone. If the big transformation is to work, so Russwurm, the private economy will have to raise around four times the investment sum as the state. She is ready for this, but the government must create the framework conditions for investment and operation, “so that it is also worthwhile.” According to the BDI President, the path to a climate-neutral industrialized country is accessible, “but the path is narrow.” The chemical industry alone estimates its energy requirement for the mid-2030s at 628 terawatt hours, more than the total German electricity consumption of 550 terawatt hours today. Over 70 percent of the energy consumed in Germany is imported. Chief lobbyist Russwurm did not want to completely rule out nuclear power from France or coal power from Poland in the future either.

When asked about Russian natural gas, the BDI President replied that it was »cheap« in terms of price. And natural gas – around a third each comes from Russia, the Netherlands and Norway – is necessary as a “transition path” to climate neutrality. The steel company Salzgitter estimates that just by replacing coal with natural gas it can reduce its CO2 emissions by 60 percent.

The industry is also in agreement with Habeck on the goal of climate neutrality, said Russwurm, but not on every point of the way to achieve this. The plans of the federal government made up of the SPD, the Greens and the FDP would have to be concretized in the first half of the year so that the engineers in the companies could get started. Otherwise, the ambitious schedule could not be adhered to. In addition, the lobby association BDI, like the trade union-affiliated IMK, is calling for a ten-year plan.

“With the right framework, there is also the chance,” said Russwurm, “that the new year will be the year with the strongest economic dynamism”. If it weren’t for the many risks: persistent delivery bottlenecks, a shortage of skilled workers that could accelerate around 2025, rising energy costs, ambitious climate and digital turnaround, the tensions between the USA, China and Russia and a fifth corona wave.

At the moment, the Omikron wave is still occupying the industry with its eight million employees. The rapidly increasing number of infections could lead to a high number of sick notes and thus hinder production. “For an industrial nation that is in international competition, there is an urgent need for a uniform, evidence-based long-term plan to contain the pandemic,” demanded the BDI President. Above all, he demands more reliable data from the corona policy in the federal and state levels.

For Germany, the BDI expects economic growth in the order of 3.5 percent this year – after 2.5 percent last year. German exports would probably increase by four percent this year. More would be possible: “The order books are full.” But production cannot keep up with demand due to pandemic-related restrictions and delivery bottlenecks. At least the latter will be resolved in the course of the year. In the auto industry, it is assumed that the worst is over. Classic industrial work strives forwards, in the process it changes and faces enormous challenges.