Germany: Industry, Manufacturing and Energy

Industry and construction accounted for 29 percent of gross domestic product (GDP) in 2003, a comparatively large share even without taking into account related services. The sector employed 26.4 percent of the workforce. Germany excels in the production of automobiles, machine tools, and chemicals.

With the manufacture of 5.5 million vehicles in 2003, Germany was the world's third largest producer of automobiles after the United States and Japan, although China was threatening to displace Germany in the world rankings as early as 2005.

In 2004 Germany enjoyed the largest world market share in machine tools (19.3 percent). German-based multinationals such as Daimler-Chrysler, BMW, BASF, Bayer, and Siemens are marquee names throughout the world. What is less well known is the vital role of small- to medium-sized manufacturing firms, which specialize in niche products and often are owned by management. These firms employ two-thirds of the German workforce.

In 2002 Germany was the world's fifth largest consumer of energy, and two-thirds of its primary energy was imported. In the same year, Germany was Europe's largest consumer of electricity; electricity consumption that year totaled 512.9 billion kilowatt-hours.
Government policy emphasizes conservation and the development of renewable sources of energy, such as solar, wind, biomass, hydro, and geothermal. As a result of energy-saving measures, energy efficiency (the amount of energy required to produce a unit of gross domestic product) has been improving since the beginning of the 1970s.

The government has set the goal of meeting half the country's energy demands from renewable sources by 2050. In 2000 the government and the nuclear power industry agreed to phase out all nuclear power plants by 2021. However, renewables currently play a more modest role in energy consumption. In 2002 energy consumption was met by the following sources: oil (40 percent), coal (23 percent), natural gas (22 percent), nuclear (11 percent), hydro (2 percent), and other renewables (2 percent).