Weak residential construction, burdened by rising construction costs as a result of new tariffs on wood and furniture, is dampening investments by wood-processing companies in new machine technology, reports Germany Trade & Invest (GTAI). Despite the high need for automation and an acute shortage of skilled workers, many companies are postponing replacement and new investments. Overcapacities from the boom years of 2021 and 2022 are exacerbating the pressure and driving a wave of consolidation. The downturn is particularly evident in the import business, which will decline noticeably in 2025 after a pull-forward effect at the beginning of the year. While Chinese deliveries are slumping sharply, German suppliers remain comparatively stable, but are confronted with higher costs and considerable administrative effort due to new US customs rules. For 2026, GTAI expects a further market slowdown due to the weak economic environment.
