According to the Ifo Institute, the once high export surpluses of companies in the southern German state of Bavaria are a thing of the past. In a newly published study, the economists at the Munich-based institute wrote that they do not believe that the state's domestic industry will regain its former strength in this respect. The study was commissioned by the Chamber of Industry and Commerce (IHK) Munich and Upper Bavaria.
According to the study, in 2023 Germany's largest federal state once again imported more goods than it exported, as it has done since 2019. Data for the whole year is not yet available, according to Ifo. However, by the end of November, the trade deficit in export goods amounted to 9.5 billion euros.
Export surpluses or deficits are neither good nor bad in themselves, said economist Oliver Falck, co-author of the study. "But high exports are an expression of competitiveness and the fact that goods 'Made in Bavaria' are in demand."
According to the study, both German and Bavarian industrial production have been falling behind since 2018, while Falck and his co-authors also point to the low level of investment by German companies in their domestic production facilities. Falck also cited a lack of skilled workers, high energy prices, and deficits in digitalization.
According to the economist, barriers to free global trade and subsidy programs abroad are accelerating the relocation of production by Bavarian manufacturers to Asia and the United States.
Manfred Gößl, Managing Director of the Chamber of Industry and Commerce, said that Bavaria as an industrial location had not been able to break away from the even stronger downward pull in Germany as a whole. "The structural change is in full swing." The basic orientation must be: "Focus on research and development, on automation, digitalization, and artificial intelligence."
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