European, German industrial fatigue endures, cannot be blamed on ‘energy anymore’

Sander Tordoir, chief economist at the Centre for European Reform (CER), said that Germany’s industrial malaise can no longer plausibly be attributed to the spike in energy prices triggered by Russia’s full-scale invasion of Ukraine in February 2022, as energy costs are now broadly similar to what they were prior to the Covid-19 pandemic.

“I think it will take time to disentangle what the factors are, but it is also very clear it cannot really be energy anymore,” Tordoir told Euractiv.

Tordoir suggested that likely causes of Germany’s industrial decline include slowing domestic and external demand as well as growing competition from China, which is increasingly prioritising the export of cutting-edge manufactured products.

“China’s manufacturing export surpluses are way higher than before the pandemic, and they tend to be in Germany’s sectors, most of all cars. So to my mind, that must be a big part of the puzzle,” Tordoir said.