National economy German industry president sees location "in free fall"
The Federation of German Industries (BDI) sees Germany as a business location in "free fall". Industry is facing a dramatic low point at the end of 2025, BDI President Peter Leibinger told the German Press Agency.
02.12.2025, 09:21
SDA
"The business location is in its deepest crisis in the history of the Federal Republic of Germany, but the German government is not reacting decisively enough."
In a new industry report, production in industry is expected to fall by two percent this year. This would be the fourth consecutive year of contraction. "This is not an economic dip, but a structural decline," says Leibinger. German industry is continuously losing substance. The business location is in "free fall".
The chemical industry, for example, is in a difficult situation. According to the report, capacity utilization in chemical plants was recently only 70 percent. The mechanical engineering and steel industries are also under pressure. The situation in the construction industry, on the other hand, appears to be stabilizing.
In the automotive industry, production is expected to increase and capacity utilization has risen. However, employment in the automotive industry has come under pressure.
Industry president calls on government to act
"Germany now needs a turnaround in economic policy with clear priorities for competitiveness and growth," said Leibinger. Every month without decisive structural reforms costs further jobs and prosperity and massively restricts the state's future room for maneuver.
Specifically, the BDI President called for the Federal Government to prioritize investment over consumer spending. The special fund must be used transparently for additional investments.
There has long been criticism of the German government shifting projects from the core budget to the billion-euro special fund for infrastructure and climate protection - in order to then finance projects such as the controversial expansion of the maternity pension with the funds freed up.
Leibinger is also calling for a consistent reduction in bureaucracy. The German government has taken the first steps. However, companies need far-reaching relief that they can really feel in their everyday lives.
