After three years of stagnation and decline, the German electrical and digital industry is cautiously optimistic about the future. "The German electrical and digital industry is likely to grow again in 2026 for the first time after three years of stagnation and decline," said ZVEI President Dr. Gunther Kegel at the industry association's annual kick-off press conference.

(Price-adjusted) production, changes in % © ZVEI

For 2025, the ZVEI still anticipates a real decline in production of 0.5%, after originally fearing a decline of 2%. In nominal terms, industry turnover is likely to have risen to around 226 billion euros in 2025, an increase of 2.7% compared to the previous year. Employment remained relatively stable at around 877,000 employees, but fell by 1.7%. Incoming orders increased by 5%.

Europe supports export growth

Turnover in billions of euros © ZVEI

Exports developed robustly in 2025 with an increase of 4.6% to 236.2 billion euros (January to November). Declines in the USA (-8%) and China (-3%) were offset by deliveries to the European domestic market and the UK. Including the UK, Europe now accounts for 57% of electrical exports; eight of the ten most important target countries are in the EU, with the Netherlands leading the way. China and the USA nevertheless remain the most important individual markets with around 9% each.

Industrial AI as a growth driver

Current economic situation. © ZVEI

The industry has high expectations for industrial AI applications in manufacturing, product development, quality control and maintenance. Hybrid systems consisting of traditional algorithms and AI methods are being used here. According to a study by IW Consult, Germany could generate additional added value of 144 billion euros by 2035. However, the ZVEI is calling for adjustments to the EU AI Act and advocates excluding industrial B2B systems from the regulations.

Microelectronics, networks and storage

Following supply bottlenecks at the end of 2025, the association is calling for an expansion of European microelectronics production, particularly in PCBs and electronics production, where Europe only has a global market share of 2% and 10% respectively. The ZVEI sees opportunities in advanced packaging.

In terms of electrification, stationary battery storage grew by almost 30% to 6.6 GWh in 2025. The expansion of transmission grids has accelerated, but distribution grids and smart meter gateways are lagging behind. In order to support the ramp-up of electromobility, the association is calling for lower electricity prices, a reduction in the electricity tax and faster grid expansion.

Defense, customs and location issues

According to the ZVEI, impetus from security and defense policy is only gradually arriving. Many companies are repositioning themselves, but large orders in the double-digit billion range are not to be expected in the short term.

US tariffs of around 15% since summer 2025, plus surcharges on steel and aluminum in individual cases, are having a negative impact. This is putting pressure on margins for electric motors in particular. Further tariffs, for example on semiconductors, are being examined. At the same time, industry representatives cite products such as Profibus/Profinet industrial communication systems - used in around 40% of US industrial networks - or sensor technology and connectors as hardly substitutable in the short term.

With regard to the relocation of production, the ZVEI points to the international division of labor that has existed for decades: only 3% of global electrical and digital production still takes place in Germany, almost half in China. It is mainly innovation-driven products with low production volumes that remain in Germany.

Hannover Messe with new hall concept

Finally, the association presented changes to Hannover Messe 2026. A new hall structure is intended to better direct visitor flows and relieve overcrowded areas. Despite reduced exhibitor space due to the pandemic and economic downturn, the trade fair remains the industry's most important international showcase.