Institution: German industry faces uncertain recovery in 2026 and may stagnate

Golden Ten Data reported on April 20 that the Federation of German Industries said on Monday it expects Germany's industrial performance to stagnate at best until 2026, warning that rising energy costs, supply chain risks, and domestic structural weaknesses are putting pressure on Europe's largest economy. The organization lowered its outlook after Germany's sluggish start to the year, adding that the Iran conflict has brought new downside risks, including rising energy costs, broader inflationary pressures, and disruptions to shipping and logistics. Peter Leibinger, chairman of the Federation of German Industries, said: "Since 2022, Germany's industrial output has declined year by year. As for 2026, we no longer expect a recovery, but rather stagnation." The organization pointed out that if shipping disruptions continue, German manufacturing may even shrink for a fifth consecutive year. Leibinger added that industrial output remains far below previous levels, with capacity utilization just slightly above 78%. He also noted that Germany’s weakness is mainly structural, citing high labor, tax, bureaucracy, and energy costs, all of which have eroded the country's competitiveness.