Increased defense expenditure forecast: industry insider predicts lasting growth in military equipment sector
The defense industry in Germany is currently experiencing a significant uptrend, with employment figures increasing significantly over the past two years. This is in stark contrast to the rest of the industry, which has seen a downward trend.
One of the key players in this boom is Diehl, a defense contractor that produces the Iris-T air defense system, which is also used in Ukraine. Diehl reports continuous hiring in its defense division, with over 1,000 hires in 2024.
Rheinmetall, another major defense conglomerate, has seen a steady increase in the number of applicants in recent years. With 175,000 German applications in 2024 and 120,000 in the first half of this year, Rheinmetall has been hiring around 500 new employees per month since the beginning of the year. Most new positions are being created in the production-related area and the IT sector.
Engineers or mechatronics engineers are particularly sought after in the areas of product development and production at Rheinmetall. The labor market expert, Enzo Weber, sees potential for the defense industry in the skilled workers from the struggling automotive and supplier industry. Weber suggests that it is possible for these workers to gain a foothold in the defense industry through consultation, mediation, and targeted qualification.
Other defense companies, such as Krauss-Maffei Wegmann, Hensoldt, and ESG Elektroniksystem-und Logistik-GmbH, have also experienced employee growth in the defense sector in recent years.
However, it's important to note that the defense industry in Germany currently employs around 17,000 people in companies that produce weapons, ammunition, or combat vehicles. While this boom is a positive development, it is not large enough to single-handedly reverse the downward trend of the industry in Germany.
A study involving the IAB suggests that up to 200,000 jobs could be created if Germany increases its defense spending from 2 to 3 percent of its gross domestic product on a debt-financed basis. However, the state must use the funds to foster competition and innovation and drive a trend change in the defense industry, according to Weber.
The Augsburg defense supplier Renk plans to increase its number of employees in the coming years. Fewer employees will be required at Renk in 2023 due to improved production efficiency.
In conclusion, the defense industry in Germany is currently in an uptrend, with significantly increasing employment figures. This trend is expected to continue until 2026, according to economist Enzo Weber. The industry offers a wealth of opportunities, particularly in the areas of production and IT, and skilled workers from other industries, such as the automotive and supplier industry, may find a new home in this booming sector.
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