According to the VDMA, the number of jobs fell by 6,800 (-0.7%) over the course of the year to a total of 1.02 million employees in companies with at least 50 employees. "The mechanical and plant engineering sector was thus able to maintain its position as the largest industrial employer in Germany. This is remarkable because, according to preliminary figures from the Federal Statistical Office, mechanical engineering production fell by 7.5% in the past year after adjusting for prices," commented VDMA Chief Economist Dr. Ralph Wiechers.

Growing concerns for 2025

Nevertheless, the outlook for the labor market remains tense. Early indicators such as the ifo employment barometer and the latest VDMA economic survey suggest that job cuts will continue in 2025. "This will not pass entirely without leaving its mark on employment figures," warned Wiechers. Manufacturers of capital goods, who are struggling with considerable economic and structural challenges, are particularly affected.

Short-time work on the rise

Many companies are increasingly relying on short-time work to avoid redundancies. According to the Federal Employment Agency, around 53,000 mechanical engineering employees were on short-time work in October 2024 - and the trend is rising. According to the VDMA survey, 27% of companies expect a further increase in short-time work in the first half of 2025, while 58% anticipate a stable level. Despite all efforts, a quarter of companies expect to reduce their workforce. "How much of this will be permanent and how much can be compensated for by new hires at a later date is impossible to say with any certainty," says Wiechers.

Demand for reforms

Employees in the German mechanical and plant engineering sector © Federal Statistical Office, VDMA

The VDMA is calling for rapid labor market policy reforms. Rising social security contributions are a particular burden on companies. "There is a great need for structural action to stabilize the social security system. Because their contributions continue to drive up the cost of employment," emphasized Wiechers. In addition, a more flexible working time law with weekly instead of daily maximum working hours and a reduction in bureaucracy are urgently needed. "If you want to retain medium-sized industrial companies, you must not shy away from sometimes painful reforms in the labor market," Wiechers concluded.