Germany: Industry
sectors put to the test

In recent years the German economy has seen a palpable downturn. Has Germany already fallen behind or is it on the cards? Will the country still be able to compete on the world stage in the future and keep pace with the increasing speed of innovation?

A new Handelsblatt background report based on our analyses shows the sectors in which Germany is still a leader. Where have there been advances and where are we lagging behind?

Handelsblatt Report (in German)

Three perspectives on the development of Germany’s sectors

To analyse the current state of play in Germany’s industrial sectors, we examined how the individual sectors have developed over the last ten years, from three perspectives:

1. “Market perspective”: This outlines the position of the German sectors on the world market. Based on a foreign trade analysis, we gave a detailed presentation of the German world export share in the individual sectors and how this has evolved over the last ten years. 
2. Real net output ratio: The real net output ratio shows how high the share of domestic value added is in the sectors examined, or rather the level of primary products that are imported from abroad. We visualised whether the real net output ratio has changed in the different sectors over time, whether they are more or less reliant on foreign primary products than previously and which delivery countries the products came from. 
3. “Innovation perspective”: The innovation perspective analysis shows how high the world patent share is in the individual German sectors and to what extent this has increased or decreased over time. 

Germany remains an export nation – 11 sectors in the world top 3

Germany remains a successful export nation:

• Looking at the world export share confirms that in many industries Germany is among the most important export nations. 
• In the competition for the highest world expert share, in eleven of the seventeen sectors examined Germany reaches the podium taking one of the top three spots.
• No other nation exports more motor vehicles or pharmaceutical products.
• In many other industries, measured on the value of export, Germany takes second place, e. g., mechanical engineering, electrical equipment, metal products, glass and ceramics or rubber and plastics.

In addition, the real net output ratio in the German economy remains stable: 

• In most of the sectors it has hardly changed for the time period examined. 
• This means that not only does the final assembly of preliminary products, which are largely manufactured abroad, take place in Germany, but a large part of the added value of German products is created here.

Warning signs not to be ignored

Nevertheless, over recent years, the German export sector has lost ground. 

• Germany’s world export share dropped from 8.1 percent in 2012 to 7.5 percent in 2022. 
• This loss is moderate, but the danger remains that Germany’s competitiveness on the world market could see a slow decline in the future.

Looking out for warning signs is important from the innovation perspective: 

• Germany’s share of world patents has been on the decrease for some years. 
• Between 2012 and 2020 it sank from 9.3 percent to 7.4 percent. 
• This is a significant warning sign as it is the basic research and product development of today that lays the foundation for the innovative products “made in Germany” of tomorrow.

How have the individual sectors developed? What distinguishes the leading sectors? You will find the answers to these questions in the Handelsblatt report.

Links and downloads

To the Handelsblatt report 

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E-mail: presse@prognos.com

Latest update: 17.05.2024