German industry lobby sees 'structural decline' for sector

Germany's industrial sector is facing a dramatic low point at the end of 2025, the head of the Federation of German Industries (BDI) told dpa, warning that the government in Berlin is not acting decisively enough.

A new report expects 2025 industrial production to fall by 2%. This would mark the fourth consecutive year of decline, BDI president Peter Leibinger said, with Germany's business environment experiencing its most severe crisis since the founding of the Federal Republic.

"This is not a cyclical dip, but a structural decline," he said, adding that the German industrial base is steadily losing substance.

The chemical industry is particularly affected, with plant utilization reportedly at just 70%.

Machinery and steel sectors are also under pressure, while construction appears to be stabilizing.

The automotive sector is expected to see a production increase, with higher industrial capacity utilization, but employment remains under strain.

Leibinger called for a decisive economic policy turnaround to strengthen competitiveness and growth. Every month without structural reforms costs further jobs and significantly narrows the state's future leeway, he said.

He urged the government to prioritize investment over consumer spending and to use special funds transparently for new projects.

Critics have long pointed to the government shifting projects from the core budget into the multibillion-euro special fund for infrastructure and climate action, then using the freed-up money for other measures, such as expanding parental benefits.

The BDI chief also called for broad bureaucratic relief, noting that while some steps have been taken, companies need reforms that are tangible in day-to-day operations.