The economic crisis is leaving its mark on the industry.

The ongoing economic crisis has cost German industry more than 100,000 jobs within a year. The automotive industry was hit hardest, according to an analysis by the auditing and consulting firm EY, which was made available to the German Press Agency. There alone, a net loss of approximately 45,400 jobs was recorded.

At the end of the first quarter, German industry employed 5.46 million people – 1.8 percent, or 101,000 fewer than a year earlier, according to the study, which is based on data from the Federal Statistical Office. Since the pre-coronavirus year of 2019, the number of employees has fallen by 217,000, a decline of 3.8 percent. In 2018, there was a record of around 5.7 million industrial employees.

Industrial companies are under enormous pressure, says Jan Brorhilker, Managing Partner at EY. "Aggressive competitors, such as those from China, are pushing down prices, key sales markets are weakening, demand in Europe is stagnating at a low level, and the entire US market is a major question mark. At the same time, companies are struggling with high costs – for example, for energy and personnel."

German industrial sales continued to decline slightly at the beginning of the year, following a slump in 2024. An end to the job cuts is not yet in sight, says Brorhilker. He expects at least 70,000 more industrial jobs to be lost by the end of the year. Companies in mechanical engineering and automotive manufacturing, in particular, have initiated austerity programs. "We'll hear a lot more bad news for a while before things start looking up again."

In the automotive industry alone, which is struggling with a sales slump, competition from China, and the shift to e-mobility, almost six percent of jobs were lost within a year. Employment thus fell to around 734,000 people as of the end of March. Employment also declined significantly in the metal production and textile industries, each by over four percent. In contrast, hardly any jobs were lost in the chemical and pharmaceutical industries (-0.3 percent).

The crisis in German industry has long since sparked a debate about Germany as a business location – critics speak of deindustrialization. However, in a long-term comparison, employment in industry has grown: According to the Federal Statistical Office, at the end of 2024, it was 3.5 percent, or 185,000 people, higher than in 2014.

EY manager Brorhilker says: "Germany as an industrial location has often been declared dead – and has repeatedly proven itself remarkably resilient thanks to its very strong foundation." However, conditions must improve: In addition to lower costs and less bureaucracy, domestic demand must be strengthened to make the economy less dependent on exports. The German government's multi-billion euro investment package could provide impetus here.

The German Association of the Automotive Industry (VDA) also believes that politicians have a responsibility. The pressure to act is high, as Germany's competitiveness as a business location has eroded in recent years, says VDA President Hildegard Müller. "Competitiveness and attractiveness as a business location must therefore be the guiding principles of the new federal government. Because the fact is: These factors determine where and to what extent investments are made – and thus also where corresponding future jobs will be created."