Germany is one of the global leaders in medical technology and is the second largest location in the world after the USA. The industry presented solid results in 2023: With a total turnover of 40.35 billion euros, it achieved growth of over five percent compared to the previous year, according to the German Federal Statistical Office. International business in particular stood out, growing by six percent to 27.37 billion euros, while domestic sales also increased by three percent to 12.98 billion euros.
German medical equipment is in demand internationally. The USA and China remain the most important export markets, as data from the industry association Spectaris shows. Almost 19 percent of exports go to the USA, while around eight percent are shipped to China. In 2023, exports to the USA rose by four percent and to China by 1.5 percent.
German medical technology is also a leader within Europe: with a 41.1% share of European industry turnover of around 134 billion euros, German manufacturers, including small companies, are setting standards. These figures impressively underline the central role of German medical technology - both for the European and the global market.
Despite this positive revenue trend, which is primarily due to strong international business, the medical technology sector is facing considerable challenges. Rising costs in almost all areas are putting pressure on the profit situation of many companies and forecasts for 2024 and 2025 assume a significantly reduced profit and investment situation in the medical technology sector.
The starting situation: The impact of the corona pandemic
The past few years, which have been characterized worldwide by the effects and aftermath of the coronavirus pandemic, have been less turbulent for the medical technology sector than for many other industries. In contrast to other sectors, medical technology has seen some positive developments during the coronavirus pandemic. Despite challenges such as production shutdowns and a decline in incoming orders - around a seven percent drop according to the Corona Trend Report by Spectaris - it is one of the industries that has benefited from the crisis.
This is because the pandemic has highlighted the immense importance of healthcare and innovative medical technology and has led to greater public recognition and increased investment. One example is the initiative of the German Federal Ministry of Education and Research, which invested around 20 million euros in the research and development of new medical technologies in September 2020. At the time, Federal Research Minister Anja Karliczek emphasized that such innovations could make a decisive contribution to overcoming the pandemic. The impact was also felt globally: healthcare expenditure in OECD countries rose to an average of 9.7% of GDP in 2021 - a significant increase compared to the stable 8.8% of previous years.
The biggest challenges for the industry this year
After years of increasing willingness to invest and increased attention, there is now a noticeable decline in this trend. The medical technology industry has not been spared from the global economic recession either. The autumn 2024 survey conducted by the German Medical Technology Association (BVMed) shows that the association's member companies only expect sales growth of 1.2 percent in 2024 - a significant decline compared to the previous year, when an increase of 4.8 percent was still expected. With costs continuing to rise, only ten percent of companies expect their profits to improve compared to the previous year. This has a noticeable impact: Investments in Germany as a business location are decreasing and the BVMed's innovation climate index remains at a low level.
According to the survey, the tense business situation in the medical technology sector is primarily due to the sharp rise in costs in Germany. The growing bureaucratic burden is a particular burden for 78% of the companies surveyed, while 72% cite rising personnel costs as the greatest difficulty. Also problematic are the increased logistics and transportation costs as well as the increased certification costs due to the introduction of the European Union's Medical Device Regulation, both of which were cited as hurdles by 66% of companies. Other challenges include the shortage of skilled workers, price pressure from purchasing groups and hospital chains, high energy prices, stricter environmental regulations and reporting obligations as well as rising raw material prices.
The pressure on the industry's profit situation is also having a clear impact on investment activity in Germany: 30 percent of BVMed member companies have reduced their investments compared to the previous year. Companies are focusing on increasing efficiency and cutting costs.
Contrary trend in employment rates: Industry continues to create jobs
Despite the burden of increased costs and a lower willingness to invest, the medical technology industry in Germany remains a reliable job engine. According to the BVMed Autumn Survey 2024, 32% of companies are planning to increase their workforce compared to the previous year (2023: 31%), while 42% are keeping the number of employees stable. Overall, the number of employees in medical technology rose slightly by one percent to just under 161,400 in 2023 and has thus been growing steadily for years.
Engineers, commercial trainees, medical technicians, nurses, computer scientists, science graduates and data scientists are particularly in demand. The latter illustrates the increasing importance of data-driven solutions and digitalization projects, which are often associated with the aim of reducing costs and making processes more efficient. Nevertheless, the search for qualified employees does not focus equally on all areas. The search focuses primarily on sales, followed by marketing and regulatory affairs, quality management, logistics and research and development.
This focus reflects the current trends in the industry. Sales staff and marketing managers play a key role when it comes to increasing sales and tapping into new markets. The focus on production and logistics, on the other hand, shows how important it is for medical technology companies to make processes more efficient and save costs - especially in view of the increasing demands on supply chains and material availability. Regulatory affairs and quality management help to ensure high standards in medical technology and bring new products to market faster, which in turn supports profitability. Overall, it is clear that the medical technology industry is focusing on employment and well-trained talent in order to overcome the challenges of the tense economic situation and at the same time further expand its innovation and competitiveness.
In summary, it can be said that the medical technology industry in Germany is faced with an area of tension between great opportunities and considerable challenges. While rising costs, bureaucratic hurdles and the shortage of skilled workers are increasing the pressure on companies, the sector remains a central pillar of the healthcare industry thanks to its innovative strength and international importance. The targeted investments in research, digitalization and efficiency improvements show that companies are also strategically aligning themselves for the future with new hires.