Frankfurt am Main – A key sector of the German economy has been stuck in a rut for several years: mechanical and plant engineering. In its annual trend report, IG Metall surveys works council members on the current state of the industry. The results paint a picture of an industry that is investing and training far too little to break out of its stagnation. The union is calling for higher investment and political support.
“The machinery and plant engineering industry is the driver of industrial transformation in Germany and around the world. The industry manufactures the machinery for digitized and climate-friendly production processes. If it stalls, progress in the rest of the industry stalls as well,” warns Jürgen Kerner, Second Chairman of IG Metall.
Lack of Investment Jeopardizes the Industry’s Future
In the survey, only a quarter of respondents said they viewed current investment levels in their companies as good or very good. Half stated that their companies are maintaining current investment levels, which remain at a critical level. This worsens the future outlook for the entire industry and for Germany as a business location. Added to this is a stagnating number of apprentices. “Companies must now set a new course toward the future so that the industry can regain momentum and become more competitive internationally,” Kerner urges. “The priority now is to invest countercyclically in order to put the crisis behind us.”
New “Dialogue on the Future” Aims to Develop Strategies
To jointly address the challenges facing the industry and shape industrial development in a sustainable manner, IG Metall proposes—in a position paper developed in collaboration with works council members—the establishment of a “Future Dialogue on Mechanical and Plant Engineering” under the leadership of the Federal Ministry for Economic Affairs and Energy. In this forum, representatives from IG Metall, industry, academia, and politics will work together to develop strategies to strengthen innovation, good and secure jobs, and more sustainable regional development. To this end, IG Metall will approach the VDMA and the Ministry of Economic Affairs to initiate the Future Dialogue.
Moderate Order Intake and Employees Under Pressure
Time is of the essence, as more and more workers are being affected by layoffs. One-third of those surveyed expect employee numbers to decline within the next year. In 129 of the companies surveyed, job losses affecting over 13,200 people have been announced. The layoffs are now increasingly affecting the core workforce, as temporary agency work and fixed-term contracts have already been largely phased out in recent years.
In addition, the tools for crisis management have been partially exhausted. For example, one-quarter of companies plan to implement short-time work or are already doing so. Furthermore, one-third of the companies are currently reducing their working-time accounts. Jürgen Kerner explains: “Against this backdrop, we call for a clear commitment from employers to Germany as an industrial and manufacturing hub, as well as sustainable and well-planned workforce management and continuing education opportunities for all employees, especially during these times of crisis.”
Responding to U.S. Tariffs with Local Content Requirements
This current situation is also reflected in the order books. Only about one-third of those surveyed rate the volume of incoming orders as good. Sixteen percent even expect orders to decline. This is due, among other things, to U.S. tariffs, which 43 percent of respondents say are harming their companies. “Policymakers must address the U.S. tariffs again. They pose an acute threat to production in Germany,” says Kerner. The U.S. is the industry’s most important export market, which is why 45 percent of companies already have production sites in the United States.
The Trump administration has had some success with its policy of forcing the relocation of production to the U.S. Fifteen of the companies surveyed are currently implementing a shift of production to the U.S. in response to the tariff increases. Another 15 companies have begun making concrete plans for relocations, and in 8 percent of the companies surveyed, the issue is at least being discussed. This is another reason why IG Metall is advocating for stronger local-content measures. The union is convinced that any company wishing to have access to the European single market must also produce locally. Only such regulations can secure production in Germany in the long term.
The Trend Report is an annual survey of works council members in the machinery and plant engineering sector conducted by IG Metall every spring since 2017. It captures their perspective on the industry. This year, more than 560 companies participated, and the survey was expanded to include questions on the impact of U.S. tariffs.
Further information:
Trendmelder 2026: Employment Is Under Pressure
Position paper by the IG Metall Mechanical and Plant Engineering Industry Network
Additional information and press photos of Jürgen Kerner
