German defense industry experiences boom thanks to growing orders

The German defense industry is in a period of dynamic growth, referred to in the media as the "golden age." Armed conflicts, primarily Russia's invasion of Ukraine, have prompted the federal government to significantly increase defense spending, which directly translates to the condition of domestic arms manufacturers. According to data cited by the German press, the value of new orders for the industry in 2025 exceeded the threshold of 30 billion euros, representing an increase of nearly half compared to the period before the outbreak of war in 2022. This growth is driven both by orders from Germany, which is implementing a plan to modernize the Bundeswehr as part of a special 100-billion-euro defense fund, and by growing exports to allied countries. In the German political tradition after World War II, a culture of military restraint was strongly rooted, stemming from the past and the post-war order. For decades, the German defense industry operated in the shadow of post-war restrictions and societal distrust. A fundamental change occurred after the Russian invasion of Ukraine on February 24, 2022, when Chancellor Olaf Scholz announced the groundbreaking "Zeitenwende" (turning point), marking the end of that era. The federal government committed to increasing defense spending above two percent of GDP and established a special modernization fund. Germany maintained its position as the world's fourth largest arms exporter, behind the United States, Russia, and France. Increased demand has meant that companies such as the Rheinmetall conglomerate or the electronic systems manufacturer Hensoldt are recording record production and employment. Rheinmetall plans to open new production plants. Meanwhile, companies still face logistical and supply chain challenges, which may affect delivery timelines. To meet strategic challenges, Germany is developing joint defense programs with allies, primarily France. These concern the future European SCAF fighter jet and the new MGCS tank, which are intended to replace current models. „„Die deutsche Rüstungsindustrie erlebt goldene Zeiten. Nach Jahrzehnten der Zurückhaltung wandelt sie sich zu einem der wichtigsten Wirtschaftszweige”” — Munich-based newspaper However, the long-term growth of the sector depends on the continuation of high state spending and the stability of international cooperation.