FRANKFURT, Dec. 2 (Xinhua) -- The Federation of German Industries (BDI) has issued a stark warning about Germany's industrial sector, describing the country's economic competitiveness as being in "free fall" and urging the government to act decisively to avert long-term damage.
In its latest industry report, the BDI, also the umbrella organisation of German industry, forecasts a 2 percent contraction in industrial production for 2025, marking the fourth consecutive annual decline.
BDI President Peter Leibinger stressed that this downturn is no longer cyclical but structural in nature. "The German industrial base is eroding," he said. "This is the deepest economic crisis since the founding of the Federal Republic, yet the federal government is not responding with the necessary resolve."
The report highlighted a continued decline in output, marking the ninth consecutive quarter of contraction. From its peak in 2018, German industrial production has steadily lost ground.
Key sectors such as chemicals, machinery, and steel remain under intense pressure, with chemical plant utilization falling to just 70 percent. The auto industry has shown modest recovery in production and capacity usage, though employment in the sector remains under strain.
Leibinger called for a "fundamental economic policy shift" focused on restoring competitiveness and driving growth. "Every month without structural reform costs jobs and prosperity, and severely limits the government's future fiscal room for maneuver," he said.
The BDI urged the German government to prioritize investment over consumption, using special funds transparently for additional infrastructure and innovation spending. The association also criticized the diversion of funds from investment initiatives toward politically driven programs such as pension expansions.
Leibinger urged for a meaningful reduction in bureaucracy, which he described as an "untapped driver of growth." ■