A recent survey conducted by the Ifo Institute in Munich indicates that approximately one in four German industrial companies report a decline in competitiveness against nations outside the European Union as of July 2025. The figure remains consistently high, mirroring results from a previous survey in April.
Internal EU competition also shows little sign of improvement, with the proportion of companies experiencing diminished competitiveness versus fellow EU member states decreasing only marginally, from 13.4% to 12.0%. Klaus Wohlrabe, head of the Ifo surveys, attributes this to “structural disadvantages” faced by German industry, citing factors like energy prices, regulatory burdens and investment conditions as contributors to a loss of ground in the global marketplace.
No industrial sector has demonstrated an improvement in competitiveness recently. The mechanical engineering sector is particularly affected, with the percentage of companies reporting declining competitiveness increasing significantly from 22.2% to 31.9%, the highest value recorded to date. The electrical industry is also experiencing increased competitive pressure. Conversely, a notably smaller proportion of firms in the automotive sector now report a negative assessment of their competitive position, with the figure halving from 33.0% to 16.1%.
“The challenges for German industry in international competition remain substantial” Wohlrabe stated. “German companies must now contend with a structural disadvantage of 15 percent compared to competitors in the United States, following the tentative agreement in the trade dispute. Whether this can be offset by new trade relationships remains to be seen”.