"We don't just have economic problems, we have structural problems," emphasized Leibinger. Industrial production in Germany is expected to fall by 0.5% in 2025, following a decline of 4.8% in the previous year. This means that the decline will continue for the fourth year in a row.

Industrial production also remains on a downward trend in the EU. In 2024, production in the EU's manufacturing sector fell by 2.7%, with a further decline of just under 1% expected for 2025. Globally, however, the picture is more positive: While Germany and the EU are lagging behind, global industrial production grew by almost 2% in 2024 and is expected to increase by 2.5% in 2025, driven in particular by emerging markets. A look at the pre-crisis level of 2019 shows that German industry was 11% lower in 2024, while European industrial production grew by 1% in the same period.

Demand for reforms

The industry associations are calling for decisive measures from the federal government to make Germany competitive again. "We need a major step forward, a bold reform agenda," says Leibinger. The industry sees an urgent need for action in four areas in particular:

• Reducing bureaucracy: The increasing density of regulation is slowing companies down. The VDMA is calling for a simplification of reporting obligations and a reduction in corporate taxes to a maximum of 25%.
• Taxes: The tax burden on companies must be reduced to an internationally competitive level in order to facilitate investment.
• Energy supply: High energy costs and uncertainties in energy policy make long-term planning difficult. A halving of transmission grid fees and an extension of electricity price compensation for energy-intensive companies are called for.
• Innovation: Germany must invest in key technologies such as AI, quantum technologies and automation. Openness to technology must be the basic principle here.

Effects and prospects

Weak industrial development is contributing significantly to overall economic stagnation. While Germany's gross domestic product is expected to continue to shrink, the global economy and the EU are expected to grow. Nevertheless, there is a small glimmer of hope: in the first quarter of 2025, production rose by just over one % compared to the previous quarter. "A bottoming out is emerging," says Leibinger. In addition, the additional spending of the special fund for infrastructure could have a positive effect on economic growth - provided it is used efficiently.

Significance of the Hannover Messe

Despite the economic uncertainties, the Hannover Messe remains an important meeting place for innovation and exchange. "The German economy does things. It tackles, invents and develops," says Leibinger. The VDMA will be presenting new developments in the fields of artificial intelligence and digital manufacturing at the trade fair. One practical example is the Manufacturing-X project, which creates secure, shared data rooms and enables companies to measure the carbon footprint of their products in real time.

The industry is facing major challenges, but is also demonstrating its innovative strength. "If we create the right framework conditions, our industry will not only remain competitive, but also set new standards," Leibinger concluded.