The mechanical and plant engineering industry in Germany is expecting a decline in production in 2025 and, for the first time in many years, the sector is facing a slight reduction in jobs. In order to strengthen Germany and Europe as a business location, the VDMA is calling for a political U-turn.
‘All the more reason why we finally need a clear and reliable economic policy again that gives companies confidence and freedom and gives them the flexibility to successfully compete internationally. An end to over-regulation, an end to strict technological requirements and an end to the far too high cost burden in Germany,’ said VDMA President Bertram Kawlath at the annual press conference.
Production down 7 per cent
According to preliminary figures, production in the mechanical and plant engineering sector fell by 6.8 per cent in the first ten months of the year. Although falling interest rates could benefit consumption and willingness to invest in the coming year, an economic upturn is not to be expected. ‘Key negative factors such as wars and protectionism as well as structural breaks will remain with us. We must therefore continue to expect a lot of headwinds and therefore confirm our forecast that the mechanical and plant engineering sector will record a real decline in production of 2 per cent in 2025,’ said Kawlath.
Small and medium-sized companies disproportionately affected by bureaucracy
The VDMA President called on the future German government not to further weaken small and medium-sized industrial companies, but to urgently create room for manoeuvre. In particular, small and medium-sized companies should be relieved of reporting obligations such as the Supply Chain Act and sustainability reports. Continue to speed up planning and authorisation procedures at municipal and state level. And also to reduce the tax burden for companies from an average of almost 30 per cent to 25 per cent, which would still be above the OECD average of 23 per cent.
Making the labour market more flexible
It is equally important to make the labour market more flexible with far-reaching reforms and to adapt it to the needs of medium-sized industrial companies. With around one million employees, the mechanical and plant engineering sector is one of the largest industrial employers in Germany. According to a survey of 500 member companies, 61 per cent of respondents expect job cuts in the next 12 months and only 20 per cent expect job increases. Only in the junior staff sector are there more companies planning to increase rather than reduce jobs.
VDMA
With 3,600 members and its headquarters in Frankfurt, the VDMA is the largest network organisation and mouthpiece of the mechanical engineering industry in Germany and Europe. The association represents the common economic, technical and scientific interests of this industry.