Germany has for decades been one of the cornerstones of European economic integration and Italy’s main trading partner. The two production systems are deeply interconnected: German manufacturing relies heavily on Italian components, while Italian companies find in the German market a solid, diversified and highly competitive demand base.
In a global context marked by transformations in manufacturing, trade tensions and competitive pressures from China, understanding the dynamics of the German economy is now essential for Italian businesses aiming to expand internationally. Despite a complex economic phase, Germany continues to represent a strategic hub for Made in Italy, also thanks to increasing integration between the most dynamic regions of Southern Germany and Northern Italy.
In this scenario, advanced financial tools, strong bilateral relations and digital services dedicated to internationalisation are key levers to support Italian companies in their growth strategies.
GERMANY: AN ECONOMY IN TRANSITION, OPENING NEW OPPORTUNITIES ACROSS EUROPEAN VALUE CHAINS
According to estimates from Intesa Sanpaolo's Research Department, the German economy is facing a challenging period, albeit with signs of stabilisation. With the growth recorded in September (+1.1%) and October 2025 (+1.8%), industrial production has fully recovered from the sharp decline in August (-3.7%). The industrial sector is therefore expected to contribute positively to GDP growth in the final quarter of the year, following the contraction seen in the summer.
On a sectoral basis, the automotive industry is struggling to regain momentum, while electronics and mechanics show greater resilience. Construction too, aided by falling interest rates and expectations surrounding the implementation of the infrastructure plan, could be nearing a turning point. Factory order data also suggests a recovery from the lowest point. Nonetheless, divergences remain: while domestic and intra-EU demand is picking up, extra-Eurozone orders remain weak, hampered by tariffs and euro appreciation.
Leading indicators suggest a return to GDP growth between late 2025 and early 2026, driven by European demand, rate cuts and fiscal stimulus. Notably, the German government is planning significant fiscal expansion in 2026, which could serve as a major catalyst for economic recovery.
ITALY AND GERMANY: A PARTNERSHIP STRENGTHENED BY INTEGRATED SUPPLY CHAINS AND INSTITUTIONAL COOPERATION
The economic relationship between Italy and Germany is built on structured bilateral cooperation, supported by institutional initiatives that promote coordination, continuity and growth. The Italian-German Action Plan establishes macroeconomic working groups, ministerial forums and collaborations between industrial associations, fostering ongoing dialogue on industrial policy, digitalisation and the energy transition.
Integration between the two production systems is further reinforced by the so-called “European backbone of prosperity”, connecting Bavaria and Baden-Württemberg with Lombardy, Veneto, Emilia-Romagna and Piedmont—regions characterised by high productivity, a dense network of tech-oriented SMEs and strong export orientation.
Trade between the two countries involves key sectors such as mechanical engineering, automotive, chemicals, pharmaceuticals, agri-food, fashion and design. In many of these industries, Italian firms serve as strategic partners in German value chains, contributing with know-how, production flexibility and quality.
Within this framework, joint innovation initiatives, European projects and open innovation programmes further strengthen the collaborative ecosystem between the two nations, boosting European competitiveness.
A DEMANDING BUT OPPORTUNITY-RICH MARKET: WHY GERMANY IS STRATEGIC FOR ITALIAN BUSINESSES
The German market requires high standards, reliable processes and consistent supply. While this demands rigour, it also highlights the strengths of Made in Italy: quality, flexibility, customisation and operational speed.
German companies’ desire to diversify their supply chains creates important opportunities for nearby European suppliers. Thanks to its manufacturing specialisation and logistical proximity, Italy stands out as one of the most strategic partners.
Opportunities are also growing in high-innovation sectors such as:
- Industrial automation and robotics
- Semiconductors and microelectronics
- New materials and green technologies
- Energy efficiency and green hydrogen
- Aerospace and defence
Another point of interest is Germany’s entrepreneurial fabric: in the coming years, thousands of SMEs will face generational transitions, opening up opportunities for industrial partnerships, acquisitions and investments by Italian businesses.
