German industrialists expect production to fall by 3% in 2024

The German industry expects a 3% drop in production in 2024. This is stated in the report of the German business association BDI.

Thus, 2024 will be the third consecutive year of decline.

According to BDI Managing Director Tanya Gönner, no recovery is expected next year either. According to her, it is especially problematic that the leading sectors of German industry are struggling with a serious decline. According to the BDI, in September, the automotive sector recorded a 6.9% y/y drop in production, while mechanical engineering and electrical engineering fell by 8.5% and 10.7% year-on-year, respectively.

The EBA notes that the industrial recession also continues in the European Union. Germany and the EU are becoming less attractive as a location.

The BDI expects German exports to decline by 0.5% year-on-year in 2024, while global merchandise trade will grow by 2%. The performance is not expected to improve in 2025, as export expectations in the country’s industry have fallen further. Imports are likely to develop just as weakly.

As GMK Center reported earlier, the situation in Germany’s economy continues to deteriorate, and its prospects are negatively affecting the expectations of steel market participants

In its October report, the IMF downgraded its GDP growth forecast for Germany in 2025 to 0.8% (previously 1.3%), while German economists lowered it to 0.5% from the previous 1.1%.

Positive improvements in the German economy in the near term may be due to the impact of the interest rate cuts that began in June 2024 and the likely end of the political crisis in the spring of 2025. Negative expectations are associated with the risk of higher import duties on German imports to the United States.