Germany’s steel and metal processing industry recorded a significant decline in production during the first half of 2025. According to the German Steel and Metal Processing Association (WSM), output fell by 3.4 percent compared with the same period of the previous year. Although production increased slightly by 2.4 percent from May to June, this modest growth was not enough to offset the negative half-year trend.
The WSM describes the sector as being in a tense situation and is urging politicians to take decisive action. “We need momentum instead of stagnation,” the association declared, calling for a “hot political autumn.” A sustainable recovery is not yet in sight: the slight growth in orders recorded in the first half of the year had already slipped back into negative territory by June.
Structural obstacles undermine competitiveness
The association cites several structural challenges as reasons for the weak performance. Persistently high energy prices and taxes are driving up costs significantly. In addition, lengthy permitting procedures are slowing down investments and modernization efforts. The industry also struggles with excessive bureaucracy and a lack of targeted investment incentives, both of which make it harder for companies to safeguard their competitiveness. Furthermore, the WSM points to an inadequate infrastructure that often fails to meet the needs of a modern industrial base.
Beyond these domestic hurdles, the industry is also facing difficulties from U.S. tariffs, which further restrict exports and limit sales opportunities in international markets.
WSM Managing Director Christian Vietmeyer emphasized: The coalition must pull together and finally push through long-overdue decisions. The key levers are well known – only by moving them can we counter the looming loss of substance in our industrial backbone.”
Initial measures are not sufficient
The association welcomed the recent abolition of the gas storage levy, describing it as a step in the right direction. However, it warned that this measure alone would not resolve the sector’s structural issues. Additional relief is needed to secure long-term competitiveness. Holger Ade, Head of Industrial and Energy Policy at the WSM, stressed: “Expensive grid charges also have to come down, and we need an industrial electricity price that applies to all manufacturing companies. Only then will small and medium-sized enterprises be able to switch to energy-dependent transformation technologies.”
A clear call to policymakers
According to the WSM, the sector is fundamentally willing to invest in sustainable production. However, this will only be possible if reliable framework conditions, targeted support, and concrete investment incentives are provided. Vietmeyer concluded: “The companies in the WSM industries are ready to invest in sustainable production, but they need support, incentives, and reliable conditions. The time for hesitation is over – the industrial SME sector needs a hot autumn with swift political decisions to strengthen the production base and safeguard competitiveness.”
