German industry loses nearly 500,000 jobs since 2019, Ifo study finds

Yesterday 23:58

By: Azzat Manal

German industry loses nearly 500,000 jobs since 2019, Ifo study finds

Germany’s industrial sector has lost nearly half a million jobs since 2019, highlighting the challenges facing one of Europe’s largest manufacturing economies. According to a study by the German economic research institute Ifo, industrial employment declined by 496,000 positions between the beginning of 2019 and the end of 2025, representing a decrease of 7.1%.

The findings were presented in a report by Joachim Ragnitz, head of the Ifo Institute’s Dresden branch. The figures point to sustained pressure on traditional manufacturing industries, where companies have been adjusting their workforces amid changing market conditions, cost pressures and wider structural shifts in the German economy.

The automotive industry recorded the largest losses among the sectors identified in the report, eliminating approximately 123,500 jobs over the period. Metal-processing companies shed another 115,600 positions, while mechanical engineering manufacturers cut around 64,500 jobs. Together, these three industries accounted for roughly 60% of the reported industrial job reductions.

The report also highlighted the impact on temporary employment. Around 243,000 workers employed through temporary staffing agencies lost their jobs in Germany, many of them having worked in industrial businesses. Such arrangements can expose workers to fluctuations in manufacturing demand, as companies may reduce temporary staffing before making permanent workforce adjustments.

While industrial employment contracted, other parts of the economy expanded. The Ifo data indicate that the non-production sector, particularly healthcare, public administration and social services, added approximately 2.2 million jobs between early 2019 and the end of 2025. This contrast illustrates a significant reallocation of employment across the German labour market.

However, the shift raises questions about the long-term implications for productivity and economic growth. Manufacturing has traditionally played a central role in Germany’s export-oriented economy, supporting supply chains, skilled employment and technological development. Although growth in healthcare and public services can meet important social needs, changes in employment across sectors do not necessarily produce equivalent gains in productivity, exports or industrial innovation.

Ragnitz warned that Germany was undergoing an accelerating structural transformation, with some of the industries that had historically underpinned its prosperity continuing to shrink. He argued that the creation of new jobs outside these high-productivity and innovation-driven sectors could contribute to slower economic growth if the trend persists.

The figures underline the challenge facing German policymakers and businesses as they seek to modernise industry while preserving its competitiveness. Investment in technology, workforce training, energy efficiency and innovation could help companies adapt to changing conditions, although the effects of such measures will depend on market demand, investment decisions and the broader economic environment.

The Ifo findings offer a snapshot of a labour market in transition rather than a complete explanation of the causes behind industrial job losses. Nevertheless, the scale of the decline highlights the importance of addressing Germany’s manufacturing challenges while ensuring that workers affected by restructuring have access to retraining and opportunities in expanding sectors.