The German economy shrank for a second consecutive year in 2024. The last time there were two years of recession in a row was in 2002/2003. According to the Federal Statistical Office, economic and structural burdens hindered better economic development last year. The authority attributes the decline in economic output to increasing competition for the German export industry in important sales markets, high energy costs, persistently high interest rates, and an uncertain economic outlook.

Many sectors are affected by uncertainty – including mechanical engineering and the automotive industry, which have recently seen falls in production levels. According to the statistics office, production in energy-intensive sectors such as the metal industry remained at a low level. In 2023, it had already fallen considerably as a result of the sharp rise in energy prices. Companies are hesitant to invest, and in view of the general conditions, business associations and companies are increasingly calling for action from politicians – in the run-up to the general election on 23 February.

The Neuenhauser Group, which is active in mechanical engineering and metal processing, complains about a misguided energy policy and an excess of bureaucracy. In an interview with Börsen-Zeitung, Lutz Wolf, CEO of the family-owned company from Grafschaft Bentheim, says he is very much hoping for a stable government being formed after the election, one that will once again put economic development in Germany centre stage. „If the economy doesn't grow, then there will ultimately be no funds for social services and environmental protection, and the mood in society will change.“

Since it was founded by Hans Voshaar seven decades ago, Neuenhauser has grown from a craft business to an industrial group with an annual turnover of half a billion euros, with more than 90% of its value creation currently taking place at over 15 locations in Germany. The company is active in mechanical engineering in recycling technology, compressor construction and other areas. In metal processing, it primarily supplies welded assemblies to manufacturers of commercial and construction vehicles, agricultural machinery, and industrial trucks. According to the concept of the founding family, the company has positioned itself broadly in order to cope with economic ups and downs in various markets in a balanced manner, explains CEO Wolf.

The company from the south-west of Lower Saxony intends to maintain its predominant focus on Germany as a business location. Relocating production and sites abroad is not on Neuenhauser's agenda. „In the course of technical progress and process automation, we have repeatedly realised in recent years that we can and want to remain in Germany,“ emphasises the CEO, who has been in the position since 2021.

The German share of Neuenhauser's turnover is reportedly over 70%, with a higher proportion of domestic customers in the metal processing sector than in mechanical engineering. Apart from smaller sales units, the group is represented abroad with production sites in Italy and the Czech Republic. Neuenhauser has shown that, as a family business with flat hierarchies, it can adapt quickly to changing conditions, says Wolf. „If we were to relocate plants abroad, we would distance ourselves from the majority of our customers.“

The CEO, who worked at the industrial group Gea, and at Siemens, before joining Neuenhauser in 2017, also makes it clear that following last year's low double-digit percentage decline in turnover, profitability will be the focus in 2025 and 2026 in order to emerge from a recessionary phase stronger than before. „We are reviewing our portfolio and consolidating to a certain extent", he says. Although areas such as automation, compressor construction and recycling technology are doing well, the order situation is „currently rather flat due to the economic situation“.

In order to keep cash levels high during the recessionary phase, the company, which has no presence on the capital markets, is holding back on investments. At the same time, the Neuenhauser boss emphasises growth potential. In the field of automation, the company made acquisitions in 2023, in order to gain market access and process expertise with a view to the pharmaceutical industry and the food and beverage sector, and to acquire technology. The acquisitions were integrated with a mechanical engineering unit, which is now called Neuenhauser Automation. „We have driven an important strategic stake in the ground for our group here,“ says Wolf.

Despite the recession, and dissatisfaction with the overall business environment, Neuenhauser remains committed to Germany. „Despite everything, we are confident about Germany as a business location,“ says Wolf. „But for all our confidence, we must also repeatedly point out that adjustments and reforms in economic and energy policy are urgently needed, following the undesirable developments of recent years.“