The German economy is in crisis, signs of recovery are weak. Industry has been hit particularly hard. More than 120,000 jobs were lost there last year alone. Experts fear further cuts.
The economic crisis is hitting German industry hard. As a result, German industry cut jobs on a large scale last year. Around 5.38 million people were employed in the sector - around 124,000 fewer than the year before.
This is according to an analysis by consulting firm EY, which is cited by the German News Agency, DPA. Job losses in the industry were almost twice as high as in 2024, according to the study, which is based on data from the Federal Statistical Office and covers companies with at least 50 employees. The hardest hit last year was the struggling automotive industry. This sector cut around 50,000 jobs, while the chemical and pharmaceutical industries performed relatively better with a loss of around 2,000 jobs in Germany.
"German industry is in a deep crisis," said Jan Brorhilker, a management expert at EY. The industry's revenues have shrunk by almost five percent since 2023. In this context, job losses are still moderate. But one thing is clear: "A real and significant economic growth would be necessary to prevent further job losses."
Further cuts expected during 2026
The trend is likely to continue into 2026. Experts at consulting firm EY fear that the industry will further reduce its workforce this year due to weak orders and strong competitive pressure. This is compounded by the growing number of bankruptcies, especially among automotive suppliers, says Brorhilker. In addition, car manufacturers are increasingly expanding production, research and development abroad - "at the expense of jobs in Germany."
Economists remain skeptical. Indeed, they expect the German economy to grow by around one percent in 2026, after years of stagnation. However, it will take time for this to translate into tangible results for businesses. Economists predict broad-based growth only in 2027, when billions in government spending on defense and infrastructure will have their full effect. The head of the German Institute for Economic Research (DIW), Marcel Fratzscher, paints a bleak picture for the German economy unless the German government undertakes comprehensive reforms. He argues that there simply is not enough labor to achieve past growth rates. Fratzscher calls for tax increases and a significant reduction in subsidies.
DW
