Election results - Industry warns Merz and SPD: "Last chance for Germany"

The current surveys by Infratest dimap paint a clear picture: 83 percent of respondents rate the economic situation in Germany as bad, only 16 percent as good. By comparison: in 2017, the assessment was exactly the opposite (84 percent good). This is further evidence of how much the wind has changed in Germany as a business location. For more than two years, the Federal Republic has had to cope with one of the biggest economic crises in recent history.

As short as this tough election campaign was, companies in this country have been sounding the alarm for a long time about the worsening problems and demanding changes in economic policy. They must have been waiting with great excitement for the result of the early federal election . On Monday afternoon, election winner and CDU candidate for chancellor Friedrich Merz announced that he was aiming for a coalition with the SPD . The economy in particular was his top priority. But what do the industry associations say about the election result? Do you believe that the presumed black-red coalition can bring about an economic turnaround?

Construction industry warns: “Last chance to turn things around”

Last year, 215,900 apartments were approved in Germany - significantly fewer than the 400,000 per year promised by the traffic light government and also the lowest level since 2010. Like many other sectors in Germany, housing construction has had a difficult few months. The Federal Association of the German Construction Industry (BDI) is positively surprised by the extremely high voter turnout (82.5 percent). But it also shows "what a huge task lies ahead for the parties," says Tim-Oliver Müller, General Manager of the BDI, when asked by the Berliner Zeitung. "It may be the last chance to turn things around - for a new unity in the country, for an economic turnaround and for a strong Germany in Europe."

The CDU/CSU and SPD have little time for this and must therefore urgently become aware of their responsibility, said Müller. There should be no 'business as usual' and no gambling over election manifesto content in order to drive up the price of a coalition. "What is needed now is a rapid formation of a government, a new federal budget and a clear focus on a clear economic and industrial policy." With its large share of GDP, the construction industry is one of the growth drivers and a cornerstone of a new growth concept. An investment program worth billions is now needed to strengthen the industrial hub. "Reducing bureaucracy and making construction easy are of course part of this," continued Müller, "but rapid growth in the short term can only be achieved if money is invested now."

Auto industry: Energy prices, bureaucracy and taxes "no longer sustainable"

Another sector that is increasingly faltering is the heart of German industry and is known all over the world: the automotive industry. German manufacturers are struggling with high production costs and energy prices. They are also failing to make the politically desired switch to electric cars . According to data from the Federal Motor Transport Authority , demand for electric vehicles collapsed by 27.4 percent in 2024. At VW , there was even the prospect of plant closures in Germany for the first time, but these were averted at the last minute after tough negotiations with IG Metall .

The Association of the Automotive Industry (VDA) explains that, given the extremely difficult global and economic situation, Germany needs a stable government as soon as possible after the election. The CDU/CSU and the SPD must now "find common ground quickly, demonstrate the ability to compromise and develop a comprehensive, courageous and future-oriented agenda for Germany in negotiations," said a VDA spokesperson. "This country cannot afford to stand still." It needs a government that takes responsibility, strengthens the location and thus the economy and growth, and thus secures the future of work and employment.

"The German automotive industry is determined to continue to serve the global market successfully from Germany," the spokesman continued. However, this requires a comprehensive agenda for the competitiveness of the location. "Companies can no longer bear the high energy prices, the excessive bureaucracy and the taxes and duties in their current form." However, the association left open in its statement whether the German automotive industry actually trusts the new government to make this change.

Chemical industry wants subsidies: “Germany must pull itself together”

The Chemical Industry Association (VCI) is demanding that the expansion of renewable energies as well as the grids, storage and backup power plants, as announced by Friedrich Merz , must finally be synchronized and optimized. However, since the necessary structural measures need time to take effect, "in the meantime, support is needed that quickly reduces the competitive disadvantage in energy prices," says VCI General Manager Wolfgang Große Entrup when asked.

This would include making the electricity tax cut permanent at the EU minimum of 0.05 cents per kilowatt hour. In addition, a reduction in transmission network charges to the average level of 2023 would have to follow through with a budget subsidy. "Germany must now pull itself together. Energy policy was a top priority in the election manifestos. Now it is important for the new federal government to follow up with action." Nora Schmidt-Kesseler, head of the Northeast Chemical Association, also calls for the abolition of the gas storage levy.

Martin May, spokesman for the plant protection industry in the VCI, is calling for the replacement of four competent authorities in Germany when it comes to the approval of plant protection products on the subject of bureaucracy. "No new active ingredient has come onto the market in the EU since 2019." The new EU plant protection approval has reduced the number of available active ingredients through stricter criteria.

Steel industry calls for "one-in, one-out regulation"

The steel industry in particular is currently suffering from the high electricity prices . According to the German Steel Industry Association (WV Stahl), the result is additional costs for the industry of around 300 million euros per year. A WV Stahl spokesperson told the Berliner Zeitung that tax relief for companies is fundamentally a key lever for strengthening competitiveness. "An important step is to make the electricity tax cut to the European minimum permanent." In terms of reducing bureaucracy, a law is needed that abolishes an old one for every new EU regulation . Germany must also implement EU directives one-to-one in order to "avoid excessive additional national requirements," the spokesperson continued.

Hans-Jürgen Völz, chief economist of the Federal Association of Small and Medium-Sized Businesses (BVMW), is calling for a modernization of depreciation rules, such as the introduction of a 120 percent special depreciation for digitalization and climate protection investments. Small and medium-sized companies in Germany in particular are in demand as suppliers to industry. Völz is therefore also calling for a reduction in "tax privileges for large assets" in order to finance the relief on other sides. With regard to the shortage of skilled workers, the association is calling on the next government to strengthen the dual training system as a basis for company succession. "To achieve this, the petty party politics must finally be put aside and measures to promote the economy must be implemented," said Völz.

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