The German Mechanical Engineering Association (VDMA) said the sector shed about 20,000 jobs in the first half of 2026, a 2.8 % year-on-year decline.
Employment in H1 2026 therefore fell from roughly 720,000 positions in the same period of 2025 to about 700,000, according to the association's figures cited by FAZ, Wirtschaft.
Why the contraction?
VDMA attributes the loss to three structural factors. First, production capacity has been under-utilised as orders for machine tools and plant-engineering equipment slowed. Second, one quarter of the sector's workforce is aged 55 or older, creating a wave of retirements that outpaces new hires. Third, operating costs in Germany's traditional industrial regions remain high, discouraging fresh investment.
Industry response
Leaders of the association are urging the federal government to speed up investment incentives and to reform the location-cost regime that they say penalises manufacturers in high-cost areas. In a statement, VDMA officials argued that without such measures the sector risks further erosion of its competitive edge.
Contrasting figures
One excerpt in the briefing mentions "about 21,500 positions cut", a number that differs from the roughly 20,000 jobs highlighted by FAZ. VDMA's official press release, however, consistently cites the lower figure.
What comes next?
The government is expected to address the sector's concerns in the upcoming industrial policy roundtable scheduled for early autumn. Observers will watch whether any new incentives are announced before the end of 2026.