A recent survey conducted by the Ifo Institute in Munich indicates that approximately 25% of industrial companies in Germany reported a decline in their competitive standing relative to nations outside the European Union as of July 2025. The finding, released Tuesday, remains consistently high compared to a previous survey conducted in April.
The data also suggests no significant improvement in competitiveness within the EU itself, with the percentage of companies experiencing diminished competitiveness compared to other EU member states decreasing only slightly, from 13.4% to 12.0%. Klaus Wohlrabe, head of the Ifo surveys, attributed this trend to structural disadvantages impacting German industry, including factors like energy prices, regulatory burdens and investment conditions. “Many companies are consequently losing ground in global comparisons” he stated.
No industrial sector reported an improvement in competitiveness. The mechanical engineering sector is particularly affected, with the proportion of companies reporting declining competitiveness rising sharply from 22.2% to 31.9% – the highest value ever recorded. Increased competitive pressure was also observed in the electrical industry. Notably, the automotive sector experienced a more positive shift, with the percentage of companies assessing their position negatively halving from 33.0% to 16.1%.
“The challenges facing German industry in international competition remain substantial” Wohlrabe concluded. “Following the tentative agreement in the trade dispute, German companies now face a structural disadvantage of 15% relative to competitors in the United States. It remains to be seen whether this can be offset by new trade relationships”.