Since 2012, the German Chamber of Commerce and Industry (DIHK) has been capturing the assessments of around 3,300 companies across the German economy.

According to the survey, the relocation trend is particularly solidifying among industrial companies: Currently, four out of ten industrial companies are considering reducing or relocating their production outside Germany due to the energy situation. Among industrial companies with more than 500 employees, more than half are now contemplating this.

Damaged Trust especially in the Industry

“The trust of the German economy in energy policy is severely damaged,” summarizes DIHK Deputy Managing Director Achim Dercks. “So far, the government has failed to provide companies with a perspective for a reliable and affordable energy supply.” This is especially true for the industry. Dercks states: “While many companies saw opportunities in the energy transition for their own operations in the years before 2023, risks have clearly predominated in their view recently.”

Barometer Value at Minus 20

The central question of the Energy Transition Barometer is “How do you assess the impact of the energy transition on the competitiveness of your company?” On a scale of minus 100 for “very negative” to plus 100 for “very positive,” the current value across all sectors is minus 20.

This is the second-lowest value in the history of the Energy Transition Barometer. Only in 2023 was the value lower, at minus 27. In the first ten years since the first survey in 2012, the sentiment value always ranged between plus 1 and minus 13. Currently, the energy-intensive industry evaluates the energy transition most critically, with an average value of minus 34. Especially in the traditionally strong industrial regions in the west and south, concerns about reliable energy supply and location costs prevail.

However, all other sector values are also in the negative. The slightly improved barometer values compared to the previous year are mainly based on feedback from service providers.

Clear Warning Signs

“In the current energy policy measures of the federal government, companies see no basis for giving the all-clear,” reports the Deputy DIHK Managing Director. “Companies still see significantly more risks than opportunities for their own competitiveness. Given the importance of the key industry sector for the entire economic location, these are clear warning signs.”

Unfortunately, the federal government has also completely omitted sustainable solutions for energy supply and energy price issues in its new growth initiative. “For many companies in the industry, however, this is currently the crucial location question,” Dercks clarifies. “Anyone who does not have this on their radar will eventually only be able to watch the deindustrialization of our country. We are still at the beginning of this process, and the government can counteract it. But the clock is ticking.”

Energy Transition Accelerates Relocation

The number of industrial companies considering production restrictions or relocation abroad is steadily increasing – from 21 percent in 2022 to 32 percent in 2023 and now 37 percent. The tendency is particularly strong among industrial companies with high electricity costs (2022: 25 percent; 2023: 38 percent; 2024: 45 percent) as well as among industrial companies with 500 or more employees. Here, the share of companies with production restrictions and relocation plans has increased from 37 percent in 2022 and 43 percent in 2023 to currently 51 percent.

Energy Costs as an Investment Brake

High energy prices also impact companies’ investment activities and thus their ability to innovate. More than a third of industrial companies report that they are currently able to invest less in core business processes due to high energy prices. A quarter say they have fewer resources for climate protection, and one-fifth of industrial companies have to postpone investments in research and innovation.

Overall, two-thirds of industrial companies see their own competitiveness at risk. “In addition to the planned production relocation, there is another acute danger for Germany as an industrial location,” warns Dercks. “If companies can no longer invest in their core processes, this is equivalent to a gradual dismantling.”

Bureaucracy and Lack of Predictability as Transformation Barriers

Regarding specific transformation barriers, excessive bureaucracy and lack of predictability rank closely behind each other at the top. Almost two-thirds of companies feel hindered by this. “Companies are confronted with regulations that in practice take up a lot of time and resources, which are then lacking for transformation and innovation,” explains the Deputy DIHK Managing Director. “The intended counteraction by the government through reducing bureaucracy and accelerating approval processes has so far not been noticeably reflected in business practice. The DIHK Acceleration Monitor also clearly shows that the government is far behind its own targets.”

Economic Expectations to the Government

Dercks: “The feedback shows that a continuation of the current course is dangerous for Germany’s economic location. Companies therefore expect a significant rethink in energy policy from the government, towards a reliable perspective with less detailed regulation.”

For example, the new survey shows that improvements in self-supply and direct supply contracts are becoming increasingly important for all companies, not just the industry. Regarding reliability, four out of five companies rate bottlenecks in transmission and distribution networks as an increasing problem for stable energy supply. Reliable access to hydrogen is also becoming increasingly important for companies. Almost two-thirds of companies therefore demand planning security here.

“The growth brakes caused by energy policy can only be resolved through a rethink,” concludes Dercks. “Companies now need a sustainable perspective for reliable energy supply with competitive prices. For around 80 percent of companies, further reduction of taxes and levies on electricity prices is a central demand.”