The sector has reportedly shed over 100,000 jobs over the past year and is expected to lose 70,000 more by the end of 2025
Germany’s industrial sector has lost more than 100,000 jobs over the past year as the country’s economic downturn drags on, according to analysis shared by the German Press Agency (dpa).
The report published last week, based on analysis by consultancy EY, shows the German auto sector accounted for around 45,400 net job losses, making it the hardest-hit segment of the economy.
At the end of the first quarter, German industry employed 5.46 million people, down 1.8% or 101,000 jobs from a year earlier, according to the study based on data from the Federal Statistical Office.
Since the pre-pandemic year 2019, the number of industrial employees has slumped by 217,000, a 3.8% decline. The sector had reached a record high of around 5.7 million jobs in 2018. According to Jan Brorhilker, managing partner at EY, industrial companies are under enormous pressure.
“Aggressive competitors, such as those from China, are pushing down prices, key sales markets are weakening, demand in Europe is stagnating at a low level, and the entire US market is a major question mark,” he said. “At the same time, companies are struggling with high costs – for example, for energy and personnel.”
Brorhilker warned that at least 70,000 additional jobs could be lost by the end of the year. Companies, particularly in machinery and automotive manufacturing, have launched cost-cutting programs to cope with the challenging market conditions.
In the automotive sector, which is grappling with declining sales, growing competition from China, and the shift to e-mobility, nearly 6% of jobs were cut over the past year, the report said. By the end of March, employment in the industry had dropped to around 734,000. Significant job losses were also recorded in metal production and the textile industry, with employment in both sectors falling by more than 4%.
The crisis in Germany’s industrial sector has reignited debate over the country’s attractiveness as a manufacturing base, with observers warning of creeping deindustrialization.
According to experts, the decline reflects the economic fallout from severing ties with Russian energy. After the 2022 sabotage of the Nord Stream pipelines and sanctions, European gas prices quadrupled year-on-year, placing severe strain on both industry and households.
However, Chancellor Friedrich Merz has adopted a firm stance against Russia, vowing to “increase pressure” on Moscow and weaken its “war machine” through further sanctions. His government recently pledged an additional €5 billion ($5.6 billion) in military aid to Ukraine.
