Struggling German Industry: Ifo Survey Reveals Declining Competitiveness
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Assessment: German Industry Faces Declining Competitive Edge in Global Marketplace - Decline in German Industrial Competitiveness Revealed by Survey
"The global trade storm is shake-shaking up the pecking order on the global markets," says Klaus Wohlrabe, head honcho of Ifo surveys. The German industry is grappling with a mountain of challenges. In the metal manufacturing and bending sector, 43.3% called it quits on their competitiveness in April, compared to 37.8% in January. The automotive sector saw a dip from 42.5% to 33%.
The anxiety of German companies losing their competitive edge within the European Union has dropped. The percentage plummeted from 20.9% in January to 13.4% in April.
- Competitive Woe
- Deutschland
- Historical Perspective
- Questionnaire
- Metal Works
- Ifo Institute for Economic Research
Ifo Institute for Economic Research Survey Deep Dive
The Ifo Institute for Economic Research in Munich, Germany, digs deep into understanding the competitiveness of various German sectors, including the metal industry, by conducting extensive surveys. The surveys serve as a barometer to gauge economic fluctuations and the hurdles faced by German corporations.
Metal Industry's Fight for Global Dominance
Competitiveness in the metal production and processing sector has been on a downward spiral. In April 2025, 43.3% of companies admitted to losing ground, up from 37.8% earlier this year.[1][2] This leakage is linked to multiple culprits, such as fiercer global competition, continuous trade conflicts, and spiraling costs, making it tough for German companies to retain their market position.[2][5]
EU Race of Competitiveness Over Time
Historically, German industries have faced stiff competition from other EU nations. However, in the recent months, we're seeing a smidgen of improvements in internal EU competition, with fewer companies marking themselves as less competitive. In April 2025, 13.4% reported a fall in competitiveness within the EU, a decrease from 20.9% in January.[2] Despite this minor victory, the overall picture remains grim, with major declines in competitiveness beyond the EU's borders.[2][5]
The Broader Economic Landscape
The competitiveness issues in the metal sector are part of a broader economic trend affecting German industry. Other sectors, like electrical and mechanical engineering and the automobile sector, are also battling a decline in competitiveness.[2][5] The automotive sector, for instance, saw 33% of companies reporting reduced competitiveness, though this represents a slight improvement from earlier in the year.[2]
The Ifo Institute's surveys indicate the urgent need for policy initiatives to tackle these challenges, stressing the crucial need for coordinated action to preserve Germany's industrial competitive edge on the global scene[5]. Although there's some positive buzz among business heads, economic growth projections remain gloomy, and export expectations have taken a nosedive[2][4].
- The Ifo Institute's surveys underscore the necessity for revising both community policy and employment policy to address the urgent needs of German industries, particularly in the metal production and processing sector.
- Moreover, finance and business leaders must collaborate in formulating comprehensive employment policies to counter the increasing challenges in various sectors, such as electrical and mechanical engineering and the automobile sector, which are also experiencing decreasing competitiveness.
