The German Metals Industry - Negative outlook, but surprisingly positive payment behaviour

The situation of the German metals sector has never been easy, but it got more challenging with the emergence of the competition of Chinese state-supported metal products as well as the downturn of the German automotive sector since 2018. Despite challenges, the payment behaviour has - counter-intuitively - improved over the years in the metals sector according to the results of our annual Germany payment surveys.

Since mid-2018, the production of the German metals sector is on a downward trend. Adding to these challenges, the surge in energy prices amid the post-pandemic recovery and following Russia’s invasion of Ukraine has heightened production costs. According to the employers’ association of the metals and electronics industry, the gross profit margin in the sector decreased from 4.4% in 2017 to 3.5% in 2021[1]. In May 2023,34% of companies in the metals and electronics sector indicated that they had, in 2022, either very low profit margins (between 0% and 2%) or even a negative profit margin (14% of respondents). In September 2023, 15% are preparing themselves for profit losses for this year.

[1] Die Arbeitgeberverbände der Metall- und Elektro-Industrie: Zahlen 2022, https://www.gesamtmetall.de/zahlen-fakten/zahlenheft/