The metal and electrical industry in Bavaria -- the German state's most important economic sector -- is facing a downturn.
A significant decline in production by car manufacturers and their suppliers is mainly to blame, the metalworking associations bayme and vbm said on Tuesday.
Production in the entire metal and electrical industry dropped by 5.4 per cent in the first five months of this year, according to the associations. In the automotive industry - including its suppliers - the decline even reached 16 per cent.
In the coming months, companies on balance expect a deterioration rather than an improvement. "The survey shows that the downturn will continue," said Bertram Brossardt, chief executive of the two associations.
The metal and electrical industry includes many well-known Bavarian companies such as Siemens, Audi and BMW.
Pessimism is leading many firms to reduce their investments and advertise fewer new jobs in Bavaria and Germany than in past boom years.
Last year, 18,000 additional jobs were created in the sector, according to the two associations; this year, about 8,000 are expected.
There are more positions in electronics, information technology and mechanical engineering, they said. But job cuts are feared in the car industry and other sub-sectors, according to Brossardt.
Overseas, on the other hand, many companies are planning to invest and also hire more staff, he said.
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