Germany Faces Industrial Decline Amid Strategic Raw Material Partnership Expansion

On November 12, 2026, the Verband der Chemischen Industrie (VCI) warned of a critical decline in Germany's industrial sector, describing it as a race against time with only 100 days to address key challenges. The VCI stressed that the German industry is losing substance, investments, and competitiveness, posing serious risks to the future viability of the nation's industrial base.

In response to these challenges, the German government is implementing a comprehensive raw material foreign policy to strengthen industrial competitiveness. The government plans to expand existing raw material partnerships with countries such as Australia, Brazil, Chile, Canada, and South Africa, while also pursuing new international sources. Central support centers will be established abroad to assist German companies with raw material projects and facilitate business contacts.

The government's strategy includes facilitating long-term purchase agreements and joint financing arrangements to ensure stable raw material supplies. Additionally, Germany aims to support partner countries in developing their own value chains, enhancing mutual economic growth and supply security.

Economists forecast the German economy to grow by 1.3% in 2026 and 1.0% in 2027, yet they caution against increasing financing gaps in the federal budget. They call for urgent reforms in social insurance and reductions in subsidies to maintain fiscal stability.

The VCI's stark alarm highlights the urgency of coordinated action by stakeholders to reverse industrial decline. Meanwhile, the government's raw material initiatives represent a strategic move to secure resources critical for maintaining Germany's industrial competitiveness amid global supply challenges.

As the country faces a dual challenge of industrial decline and global raw material competition, the coming months will be pivotal in determining Germany's industrial future and economic resilience.