Machinery Sector Maintains Workforce Stability Amid Economic Challenges

As Germany's machinery and equipment manufacturing sector enters a challenging year in 2025, it has managed to keep its workforce numbers relatively stable despite ongoing economic difficulties. However, industry experts warn that this situation may soon change due to continued economic weakness.

Recent reports indicate that, while there has been a notable decline in orders and production, the overall employment figures in the sector have only seen a minimal decrease of 0.7%, translating to approximately 6,800 jobs lost. By the end of the previous year, there were about 1.02 million individuals employed in companies with at least 50 workers, reinforcing the sector's status as Germany's largest industrial employer.

The VDMA (German Engineering Federation) has highlighted that around 25% of companies are contemplating workforce reductions in the coming months due to the sluggish economic climate. Ralph Wiechers, the chief economist of VDMA, emphasized the uncertainty regarding the permanence of these potential job cuts and the possibility of future hiring to offset losses.

Despite facing these challenges, the VDMA asserts that many companies are committed to preserving their core workforce, largely due to a shortage of skilled labor. Approximately 60% of firms anticipate maintaining their employee levels throughout the first half of 2025, reflecting a determination to retain talent amid competitive hiring conditions.

In light of these circumstances, the VDMA urges the new government to implement urgent labor market reforms to enhance the situation fundamentally. Proposed changes include the establishment of a modern labor time law that allows for weekly rather than daily maximum working hours, as well as a significant reduction in bureaucratic obstacles, particularly within labor law.

This scenario underscores the resilience of the machinery sector, which, despite external pressures, continues to strive for stability in employment. However, the call for governmental action highlights the critical interplay between economic conditions and workforce management in Germany's manufacturing landscape.