German industry is expected to stagnate at best in 2026, the BDI industry association said on Monday, warning that higher energy costs, supply chain risks and domestic structural weaknesses were piling pressure on Europe’s largest economy.
At the opening of the Hannover Messe trade fair, BDI lowered its outlook after a weak start to the year and said the conflict in Iran had added fresh downside risks, including costlier energy, broader price pressures and disruptions to shipping and logistics.
“Since 2022, industrial production in Germany has fallen every year. For 2026, we no longer expect a recovery, but stagnation,” BDI President Peter Leibinger said.
Germany’s manufacturing sector could even contract for a fifth straight year if shipping disruptions persist, the association said. Industrial output remains well below earlier levels and capacity utilisation is only a little above 78%, Leibinger added. Reuters
