German Machinery Sector Faces Third Consecutive Year of Decline

The VDMA predicts an 8% production drop for 2024, citing global uncertainties, domestic challenges, and rising competition from China.

The German machinery and plant engineering sector, employing over one million people, expects an 8% production decline in 2024, following a 2% drop in 2023, with a further 2% decline predicted for 2025.
VDMA President Bertram Kawlath attributes the downturn to global instability, geopolitical tensions, and domestic issues such as high costs, bureaucracy, and rigid labor policies.
Despite challenges, nearly 72% of VDMA companies plan to expand their operations in the U.S., driven by opportunities in reindustrialization and demand for specialized European machinery.
The sector faces increasing competition from subsidized Chinese firms and anticipates a tougher global market as China pushes for dominance by 2049.
Concerns over a potential slight reduction in jobs persist, though companies aim to retain core staff and address a growing skills gap through reforms and increased labor market flexibility.