German Capex Project Outlook 2024/2025

As we make our German capex project data available to all for the first time, we look at the main trends and challenges facing the pharmaceutical, life sciences, food and drink sectors in Germany. Get ahead of the emerging trends and opportunities in this exciting market and learn about the German capex project outlook for the year ahead.

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Moving toward the end of 2024 and into 2025, there are several significant challenges facing the German economy and as such, the main process manufacturing sectors. Companies are having to adapt capex programmes considering both the local and global headwinds facing Germany, plus evolving consumer trends and preferences. Higher interest rates mean that project finance is harder to come by, and resource bottlenecks mean companies are having to be selective with which capex projects to try and implement.

Trends

German Capex Project Outlook Food & Drink Sector

In the German food and drink sectors, capex is still relatively buoyant but is being impacted by evolving consumer trends. Consumers are increasingly choosing to cut back on meat consumption. The rise of so-called ‘flexitarians’ means there is a growing demand for protein alternatives and plant-based foods.

The same is true for the dairy sub-sector. Consumers are choosing to purchase dairy alternatives in increasing numbers, leading to strong demand that may well continue to grow over the next year and beyond.

As consumers become more health conscious, there is a growing demand for ‘wellness’ products such as fermented, pre-biotic and pro-biotic foods. Habits around alcohol consumption are also changing, with a strong demand for low and no-alcohol beverages set to continue to drive investment in German drink production.

Pharmaceutical & Life Sciences

The German pharmaceutical industry is currently very buoyant. The boom and continued success of anti-obesity drugs is a major driver of capex activity, and we expect it to remain so for the foreseeable future.

Investment in potential treatments targeting central-nervous system disorders is also on the rise, targeting conditions such as Alzheimer’s disease.

Cell and gene therapy is also a continued growth area of focus for manufacturing. Precision medicine, where personalised therapeutics are developed, should remain a strong area of innovation and growth. There is an aspiration to leverage whole-genome sequencing (CRISPR) in individuals’ routine healthcare, which, combined with new development in mRNA vaccines and the next generation of therapeutics, will continue to feed into strong planned capex for the coming year.

Challenges for the German Capex Project Outlook

The lingering effects of COVID and the impact on global energy markets resulting from the Russian invasion of Ukraine have caused major impacts on the German economy. For manufacturers, this means that raw material and energy price fluctuations make product development increasingly uncertain. The impact on capex project activity is therefore to discourage investment in high energy intensive activity and stifling the capex project pipeline.

Germany’s challenges are not unique – they are shared by many countries that we report on and are influencing capex plans and making the sales landscape challenging. Suppliers of capital equipment and machinery need to be increasingly agile as a result. The project lifecycle is generally more turbulent, with decisions coming quickly and procurement windows narrowing slightly.

Those able to match their products with the growing focus on sustainability, energy efficiency and new emerging technologies will likely find opportunity. However, there is a greater need than ever for up-to-date intelligence for suppliers to make sure they are in the right place at the right time — having the correct conversations with key decision makers to create successful new partnerships.

Our German Capex Coverage

We are currently tracking active German capex projects worth over a combined potential investment value of €10bn and growing. Full background, timescales, project scope and key decision maker details are available to our subscribers via our project search engine, MyProtel.

Conclusion

Despite challenges, as an industrial powerhouse of Europe and the world, Germany still represents a very lucrative and buoyant capex marketplace in 2024. In the pharmaceutical, life sciences, food, drink and R&D sectors, we are seeing a strong pipeline of both emerging capex plans and schemes in implementation.

Manufacturers are navigating a challenging landscape and trying to cope with global headwinds. Local challenges are also present, with resource bottlenecks and rising costs making the market more competitive than ever. Suppliers of capital equipment need to therefore position themselves as trusted partners able to work with manufacturers to solve these problems, if they have the right contacts to do so. 

As ever, it is important for suppliers to remain agile; to be best able to capitalise on areas of strong demand and growth, which Germany has in abundance.

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Interested in turbocharging your German capex project pipeline? Find out how we can help your team hit their commercial goals or start their journey into targeting the German market by getting in touch.