The German electrical industry anticipates a return to growth by 2025, signaling a shift from recent challenging conditions. Gunther Kegel, president of the ZVEI, the German Electrical and Digital Industries Association, expressed hope for “a return to slight growth” in the coming year, according to reports. This forecast follows a significant contraction in the sector’s revenue during 2024, which experienced a decline exceeding seven percent – a steeper drop than observed during the COVID-19 pandemic year of 2020.
This renewed optimism represents a change in outlook. Previously, the industry had projected a continued, albeit slight, contraction in real production. However, an improving economic landscape is now driving the revised expectations.
The outlook, however, remains contingent on the ongoing dispute with the United States. Kegel cautioned that a negative resolution to the trade conflict, particularly stemming from decisions made by former President Trump, could result in a performance significantly below the zero-growth line in 2025. He emphasized, however, that an existential crisis for the industry is not currently anticipated. A levying of a 30% tariff would, he noted, effectively price German suppliers out of the American market for many products.
The German electrical and digital industries represent the second-largest sector in the country, employing nearly 900,000 people, trailing only the engineering sector. Looking ahead, Kegel predicted that within a decade, the industry is poised to become Germany’s most significant sector.