Germany’s industrial sector is being hit by a sharp economic slump that has eliminated more than 100,000 jobs in the past year.
According to an analysis by the auditing and consultancy firm EY using data from the Federal Statistical Office, German industry employed 5.46 million people at the end of the first quarter of 2025, a massive 1.8 percent, or 101,000, fewer than a year earlier.
This steep fall shines a light on an economic crisis, which has been whittling away at jobs within manufacturing since August 2023.
The auto sector has been hit hard, with about 45,400 net job losses. It is in part a barometer of the crushing burden on Germany to maintain its traditional manufacturing base, compounded by soaring production costs, late adaptation to electric vehicles, cutthroat global rivals and geopolitical tension.
The worst, experts caution, is not over in terms of job cuts. At least another 70,000 industrial jobs would be lost by the end of 2025, according to Jan Brorhilker, managing partner at EY.
The gloomy picture is also backed up by a poll by the German Economic Institute (IW) that in April this year found more than a third of German firms plan on slashing jobs in 2025.
Once the economic powerhouse of Europe, Germany has flat-lined since two years, looking at a contraction in the GDP in 2023 and 2024.
Falling exports, especially to critical markets such as China, and the threat of further US tariffs are adding pressures. The manufacturing PMI has never crossed above the growth level since then, indicating continuing contraction.
Although some industries such as healthcare and education show resilience because of demographic demand, the overall industrial horizon is not robust.
The “alarming” condition of the economy, as employers’ associations termed it, represents a call for policy changes to stabilize the economy and protect Germany’s industrial base. Without an intervention of the magnitude that China has seen, Australia is at risk of losing more ground on manufacturing and of long-term unemployment.