German Industry Faces Uncertain Future Amid Challenges

Germany's mechanical engineering and steel industries are grappling with a challenging future. Predictions for 2025 indicate a third consecutive decline in production for mechanical engineering, a sector employing over a million people. The steel industry is similarly beset by global overcapacity, soaring energy costs, and a complex shift towards greener practices. ThyssenKrupp Steel views 2025 as pivotal for its future.

VDMA President Bertram Kawlath calls for reduced regulation and greater labor market flexibility to alleviate the burden on industries. Meanwhile, Chancellor Olaf Scholz's promise of support comes amidst political instability following the traffic light coalition's collapse. High costs and bureaucratic hurdles exacerbate the crisis, prompting some companies to consider relocation.

As orders dwindle, capacity utilization drops below 80%, leading to potential job cuts. The industry's outlook remains bleak, though decreasing interest rates might spur investment and economic recovery. Nevertheless, significant improvements are not anticipated, with many firms bracing for downsizing and hoping for policy shifts to support the struggling sector.