According to the association, German industry is still under increasing pressure. The slight growth that was previously expected is no longer realistic. At the start of the trade fair, the industry association is also stepping up its criticism of the political decision-makers in Berlin and Brussels.

Decline in industrial production in Germany

Industrial production in Germany has declined year on year since 2022. The industry is not expecting any recovery this year either and has revised its growth forecasts downwards accordingly. At best, stagnation is still to be expected.

The US and Israeli war against Iran, rising energy prices, ongoing disruptions in supply chains and disruptions to international shipping - particularly in the Strait of Hormuz - are putting additional pressure on the industry. Against this backdrop, there are growing concerns that production could shrink for the fifth year in a row. Capacity utilization in the industry is currently below 80%.

"Every year, the Hannover Messe showcases the capabilities of our industry. It shows innovative strength, engineering skills and entrepreneurial spirit. But in recent years, it has regularly shown the pressure this industry is under. Initial impressions from discussions yesterday and today show that this pressure continues - and is growing," said Peter Leibinger, President of the Federation of German Industries, at the start of the Hannover Messe.

Geopolitics as an additional negative factor

According to the association, the intensified geopolitical situation in particular is having an increasing impact on the global economy. "The geopolitical situation has worsened significantly recently. The war in the Middle East has hit the global economy - and therefore us - at a particularly sensitive point," says Leibinger. The consequences ranged from rising energy prices and supply chain risks to a reluctance to invest.

"Investments are being postponed, plans are being postponed," it continues. Even if the conflict were to end quickly, the economic consequences would remain considerable: global growth could fall by up to 0.3 percentage points, in the eurozone by around 0.5 percentage points. Inflation is likely to "increase by just under one percentage point worldwide and in the eurozone".

If the conflict lasts longer, there is a risk of significantly stronger effects and even stagnation in the eurozone.

Industrial production stagnates
The economic situation in German industry remains tense. "Production in this country is still well below previous levels. Instead of a solid recovery before the war, we now expect stagnation in 2026 compared to the previous year. This means we are moving sideways, not upwards."

Germany is falling further behind in international comparison. Although government investment is supporting demand, it is not enough for a sustainable upturn. "The war in Iran will ensure that the hoped-for upturn is postponed well into the second half of the year or completely into 2027."

A decline in industrial production of 1.5% is forecast for 2025. Although the export business has recently picked up slightly, the trend is fragile. Production has been falling every year since 2022.

While global industrial production grew by over three percent in 2025, Germany lagged behind. Capacity utilization is also historically low: "Production capacity in industry was recently only utilized at a good 78% - over five percentage points less than the long-term average," says Leibinger. It has been below the average for eleven quarters.

The decline continued at the beginning of 2026: "And industrial production also fell again in the first two months of 2026 - by one percent compared to the previous quarter." The consequences are clearly noticeable: "Machines are standing still. Capacities remain unused. Companies and their employees are coming under pressure, employment is being cut and insolvencies are on the rise."

The only ray of hope is the recent increase in incoming orders: "Even if you exclude some large orders, which distort the picture, the increase is still 1.9 percent."

German industry shows innovative strength despite the crisis

Despite the economic burdens, the BDI emphasizes the performance of the industry. The industry is "innovative, efficient and does its part to ensure a competitive location". There have been particularly strong developments in the areas of automation, robotics and artificial intelligence. "We also see the enormous importance of so-called domain knowledge in the application of artificial intelligence."

Finally, the association points out the importance of the trade fair itself: It continues to show "what German industry can do".