Key Facts
• Dec 2: German Industry Federation (BDI) revised 2025 industrial output forecast to -2.0%.
• March forecast for 2025 industrial output was -0.5%.
• Germany’s GDP: 2023 and 2024 expected to decline, 2025 forecasted at 0.2% growth.
• Chancellor Merz pledged rapid industrial recovery, agreeing to a €500 billion infrastructure fund in March.
• BDI criticized insufficient government action, urging structural reforms and reduced bureaucracy.
• October machinery orders rose slightly, driven by non-Eurozone demand, while domestic orders stagnated.
• VDMA economist Johannes Gernandt highlighted lack of progress in economic reforms and trade recovery.
• January-October 2025 machinery orders fell 1% year-on-year, signaling continued industry stagnation.
Summary
The German Industry Federation (BDI) has warned of a ‘freefall’ in the country’s economy, revising its 2025 industrial output forecast to a 2.0% decline. Despite Chancellor Merz’s €500 billion infrastructure fund initiative, GDP growth remains sluggish, with 2023 and 2024 expected to contract and 2025 forecasted at just 0.2% growth. The BDI criticized the government for insufficient reforms, calling for increased investment and reduced bureaucracy. Similarly, the German Mechanical Engineering Industry Association (VDMA) reported stagnant domestic machinery orders, with slight growth driven by non-Eurozone demand. Economist Johannes Gernandt emphasized the lack of progress in economic reforms and global trade recovery, noting a 1% decline in machinery orders for January-October 2025. The industrial sector continues to face significant challenges, requiring decisive government action to prevent further economic decline.
