Despite a modest uptick in revenue at the start of the year, job losses in Germany's industrial sector show no signs of slowing down. By the end of the first quarter, the number of industrial employees had fallen by 127,300, or 2.3 percent, compared to the same period a year earlier, according to an analysis published on Monday by the consulting firm EY. Since 2019, the German industrial sector has shed approximately 341,500 jobs, the equivalent of every 17th position in the industry.
The automotive industry has been hit particularly hard, with one in every seven jobs disappearing in recent years, according to EY's industry barometer. The textile and metals industries also experienced significant percentage-based workforce reductions. Bucking the trend, the chemicals and pharmaceuticals sector as well as the electrical industry were the only branches to register job growth during this period.
The persistent job losses are rooted in a prolonged period of weak revenue performance across the industrial sector. However, after ten consecutive quarters of declining revenues, German industry recorded its first year-on-year increase in the most recent quarter. Revenue rose by 1.7 percent compared to the prior year, according to EY.
The revenue gains were almost entirely attributable to the metals industry, which posted an 18 percent surge in turnover. The automotive sector saw revenue climb by 2.1 percent, while the electrical industry recorded a 1.4 percent increase.
On the other hand, several sectors continued to struggle. The textile industry reported an 8.2 percent drop in revenue, the paper and cardboard segment saw a 5.9 percent decline, and the chemicals and pharmaceuticals industry experienced a 5.0 percent fall.
"The coming months will show whether the growth in a few individual sectors is merely a flash in the pan or a genuine turning point," explained EY expert Jan Brorhilker. The industrial electricity price and the reduction in corporate tax were important steps, "but ones that will only take effect in the future."
Additional burdens were arising from geopolitical conflicts, growing protectionism and trade disputes. As a result, there was currently a lack of confidence and trust in Germany as a business location.
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