Germany has one of the largest economies in the world. The majority of its jobs are in the service industries, many in manufacturing industries. According to the government website Facts About Germany, three-quarters of all jobs in Germany are in the service industries. While many countries are still struggling to come back from the economic harms of the COVID-19 pandemic, Germany is in a relatively strong position. According to a recent "Market Overview" by the International Trade Administration, "Germany weathered the COVID-19 pandemic’s devastating economic effects better than any of its EU neighbors."
Many regions of Germany are known for specific types of economic activity: Munich for high-tech manufacturing; Stuttgart for automotive manufacturing and construction; Frankfurt am Main as a financial center; Rhine-Neckar as a center of chemical manufacturing and the IT industry; Berlin for startups; and Hamburg for its port, media, and aviation industries.
In an article titled "Six Strengths of the German Economy" on the deutschland.de website, the author explains that one distinctive aspect of the German economy is that, rather than being dominated by large corporations, it is mainly composed of smaller companies. The article explains, "The beating heart of the German economy is its small and medium-sized enterprises." It says, "SMEs make up 99.6% of all businesses in Germany with an annual turnover of less than €50 million and fewer than 500 employees, but almost 1,000 of them are global market leaders known as ‘hidden champions.’"
Germany is known worldwide for its automotive industry, with brands such as BMW, Audi, Volkswagen, and Mercedes-Benz. According to the German government website, deutschland.de, "The automotive industry is a central pillar of the German economy, " and directly employs almost 780,000 people. In addition, several hundred thousand more work in affiliated areas such as car dealerships and workshops or in the factories of German carmakers abroad. For instance, Volkswagen alone employs an estimated 680,000 people worldwide. Recent trends in this industry include increasing digitization and the development of climate-friendly vehicles.
In addition to automobiles, Germany manufactures many other products. According to deutschland.de, "Eight million employees were working in the manufacturing sector in Germany in 2020." It points out, "That is more than the population of Denmark." Germany is particularly well-known for its chemical and electrical industries and for its mechanical engineering sector. In the chemical industry, more than 480,000 people are employed, according to deutschland.de. German company BASF is the largest chemical producer in the world and has production facilities in a number of other countries in addition to Germany. Siemens is one of the largest companies in the electrical industry, which overall employs more than one million people, according to deutschland.de.
In recent years, demand for sustainable and environmentally friendly products has increased worldwide. Germany has become a leader in providing solutions to fill that need. Germany Trade & Invest, the economic development agency of the Federal Republic of Germany, recently predicted, "By 2025, the market for environmentally friendly products is expected to account for 20 percent of German GDP." It concludes, "This clearly demonstrates the increasing importance of sustainable technologies in Germany’s economy." One particular strength is in water technology; Germany is one of the largest exporters of water treatment technology.
According to Germany Trade & Invest, Germany is the largest pharmaceutical market in Europe and the fourth largest in the world. It has more than 600 different companies and generates billions of dollars in revenue. Germany Trade & Invest says that Germany has also become a leader in the development of biopharmaceuticals. Top companies include Bayer, Merck, and Pfizer.
Salaries in Germany are generally higher in cities like Berlin and Munich and lower in smaller towns or rural areas. Germany’s Federal Statistical Office provides salary estimates for a variety of industries:
While its economy has been stable and experiencing strong growth in recent years, Germany has been struggling to fill a labor shortage caused in part by its aging population. In a 2024 news conference, German Economy Minister Robert Habeck stated, "We lack hands and minds." The country has done a number of things to make it easier for skilled workers from other countries to work there. For instance, the 2020 Skilled Immigration Act made it easier for skilled workers to immigrate to Germany.
For those people who want to pursue job training, Germany also offers something called "dual vocational training." The Facts About Germany website explains that this system combines learning in the classroom with time at a vocational college. It says, "Students spend three to four days a week learning the practical elements of a profession in the workplace, with specialist theoretical teaching at vocational college on the other day(s). It generally takes between two and three-and-a-half years to complete dual vocational training, and trainees are paid during this time." According to the website, this training system has proven very effective and is now used in other countries.