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Germany’s industrial sector recorded its lowest employment level in 10 years in 2025, with the number of workers dropping to just 6.6 million, according to a study by the German Economic Institute (IW). The findings highlight growing concerns about Germany’s industrial competitiveness and the ongoing debate surrounding deindustrialization.
The report revealed that the decline in industrial employment was not primarily caused by large-scale layoffs. Instead, many companies have become increasingly cautious about filling vacant positions and recruiting new employees. This slowdown in hiring has contributed significantly to the sector’s shrinking workforce.
Labor market experts warn that the trend could signal broader challenges ahead for Germany’s economy. Luisa Kunze, a labor market specialist at the Bertelsmann Stiftung, which commissioned the study, described the reduction in new hiring as a warning sign for future employment developments. She noted that weaker recruitment activity often precedes more significant labor market changes.
The study also found that industry’s share of Germany’s overall labor market has steadily decreased over the past decade. Since 2014, the sector’s employment share has fallen from 22% to 19%, reflecting a gradual shift away from traditional industrial jobs. The figures have intensified discussions about whether Germany is experiencing a long-term process of deindustrialization.
Another key factor behind the employment decline is the changing attractiveness of industrial jobs. Historically, manufacturing and industrial companies offered significantly higher wages than many other sectors. However, the report found that this wage advantage has been reduced by roughly half over the last 10 years, making industrial employment less appealing to job seekers.
As Germany’s industrial sector faces mounting challenges, including slower hiring and declining labor market share, policymakers and business leaders may need to explore strategies to boost competitiveness, attract skilled workers, and support long-term industrial growth.
