The metal and electrical industry, which employs almost 4 million people in Germany, is pessimistic about the outlook for coming months.
The employers' association Gesamtmetall expects production in the sector to fall by 2% to 3% in the current year.
"In view of the weak order situation and the continuing pessimism, a continuation of the downward trend is likely," said Gesamtmetall's chief economist Lars Kroemer.
Last year, the industry recorded an increase in production of 2.6% compared to the previous year, according to figures from Germany's Federal Statistical Office.
"However, the recovery came to a halt in the second half of 2023. In the fourth quarter of 2023, production fell again for the second quarter in a row," Gesamtmetall said. The production level is therefore once again around 10% below the pre-crisis level of 2018.
"In addition to production, turnover and sales also continued to decline in the fourth quarter," said Kroemer.
"In addition to weak domestic business, revenue outside the eurozone in particular is falling."
The industry recorded a drop in turnover of 2.2% in the fourth quarter and a decline in sales of 2.5%.
According to Gesamtmetall, the order volume in 2023 was 5.1% below the previous year's figure.
The association said the decline had continued in the fourth quarter of 2023, despite the booking of large orders at the end of the year. Companies continue to rate demand as poor.