German industry continues to lose ground in global markets, according to the latest survey by the Munich-based Ifo Institute. In April 2025, 24.4% of companies reported a decline in competitiveness outside the EU, up slightly from 23.9% in January. Although internal EU competition showed minor improvement—with the share of companies reporting reduced competitiveness falling from 20.9% to 13.4%—the overall trend remains troubling.
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The metal production and processing sector has been particularly affected, with 43.3% of companies reporting a downturn, compared to 37.8% earlier this year. Electrical and mechanical engineering industries also noted further weakening. In the automotive sector, 33% of firms reported declining competitiveness, though this is a slight improvement from 42.5% in January.
'German industry is gradually losing its clout in international comparison,' said Klaus Wohlrabe, head of Ifo surveys. He highlighted "enormous challenges" in global competition, worsened by ongoing tariff disputes that are 'reshaping the balance of power on global markets'.
Additional data from the Ifo Institute paints a complex picture. Export expectations fell sharply in April to -9.8 points, the lowest since May 2020. While business sentiment improved marginally, rising to 86.9 points from 86.7 in March, economic growth forecasts remain subdued. The Ifo Institute projects a mere 0.2% growth in Germany's price-adjusted GDP for 2025, marking a downward revision from previous estimates.
Inflation also continues to challenge the global economy, with a worldwide rate of 4.0% expected in 2025. In Germany, the rate is projected at 2.4%.
Despite a slight rise in retail confidence, overall indicators point to persistent economic headwinds and a steady decline in Germany's industrial competitiveness on the world stage.
Source: www.moebelmarkt.de