German industry is currently facing a variety of challenges that have the potential to impact the nation's growth and competitiveness. With 2025 just around the corner, it is viewed with mixed feelings as companies and business leaders struggle with uncertainty and pressure to adapt. The European context, particularly the situation in the Eurozone, adds further complexity, with fluctuating markets and geopolitical tensions affecting economic stability.
The difficulties facing German industry are complex. A key problem is the loss of competitiveness, which is partly due to rising production costs and the ongoing pressure from low wages in other European countries. Demand for German products is also affected by the economic situation in countries such as China, where an economic slowdown is weighing on export figures. In addition, customs duties and trade barriers are hampering the potential for growth in new markets.
Alexander Izgorodin from Citadele Bank emphasizes how difficult the situation has become for Germany. Companies are not only struggling on the international stage, but also have to fight hard for market share within Europe. The year 2024 was already challenging, with stagnating growth and continuing high energy prices that are driving up production costs. The outlook for 2025 remains diffuse as companies try to reposition themselves through innovation and efficiency improvements.
This is in stark contrast to Lithuania, whose industry is experiencing impressive growth. Although Germany is in a loss-making phase, the Lithuanian economy has strengthened its competitiveness and is proving to be more agile and adaptable. Lithuania has benefited from the shortage of orders in Germany by investing specifically in the acquisition of contract manufacturing. This strategic move has proven to be lucrative and has opened up new growth opportunities for Lithuanian industry.
Lithuania is skillfully taking advantage of the current economic constellation by expanding into markets previously dominated by German companies. This confidence for 2025 is due to solid fundamentals supported by smart investments and flexible labor market policies. Lithuania's ability to capitalize on Germany's weakness also casts a critical eye on the European economic landscape, where smaller players are increasingly gaining influence.
Both countries are facing crucial years in 2025. While Germany addresses its industrial challenges by potentially investing heavily in sustainable technologies and digital transformation, Lithuania continues to focus on consolidating its market share gained through contracts. The coming years will show how the two industrialized nations position themselves within the European competitive landscape and what the longer-term consequences will be.
