Significant Decline in Orders for German Electrical Industry

The German electrical and digital manufacturing sector concluded 2024 with a notable decrease in orders, reflecting ongoing challenges within the industry. According to the ZVEI (German Electrical and Electronic Manufacturers' Association), total orders fell by 9.6% compared to 2023.

December proved particularly difficult for the sector, with companies recording a staggering 19.5% drop in orders year-on-year. This decline was approximately double the average of the preceding eleven months, indicating a sharp contraction in demand. Notably, the downturn in domestic orders was more pronounced than the decline in foreign orders.

Andreas Gontermann, chief economist at ZVEI, highlighted that while only 14% of electrical companies reported issues related to skilled labor shortages and material scarcity, a significant 54% are struggling with a lack of orders.

Looking ahead, the ZVEI predicts continued challenges for 2025, forecasting a further decrease in production levels. The production of electrical and electronic goods, adjusted for price effects, declined by 9.1% in 2024 compared to the previous year. The association anticipates an additional real production decline of about 2% in 2025.

The industry's revenue, which employs approximately 892,000 individuals in Germany, also suffered setbacks. Preliminary figures indicate that revenue reached EUR223.2 billion in 2024, reflecting a 6.2% decrease from the record earnings achieved in 2023.

As the German electrical industry navigates these challenging times, stakeholders are urged to adapt strategies to bolster demand and stabilize production moving forward.