The German industrial story for most of 2023–2025 was DAX-led and unrelentingly gloomy — energy costs, China demand, autos cycle, the structural concerns about model-T moments. The story remains broadly accurate at the listed-large-cap level. But it misses what has been quietly underway at the Mittelstand level: a real, measurable, broad-based capex cycle focused on automation, energy resilience and AI-enabled production. The KfW Mittelstand panel has shown rising capex intentions for six consecutive quarters.
Key takeaways
- Mittelstand capex intentions have risen for six consecutive quarters.
- The capex mix is dominated by automation, energy and AI-enabled production.
- The DAX is not yet reflecting this because the beneficiaries are mostly unlisted.
- The German banking system is funding the cycle.
Why the Mittelstand is leading
Mittelstand companies operate on longer planning horizons and shorter decision cycles than DAX large-caps. They responded earlier to the energy shock, faster to the automation imperative, and more pragmatically to AI integration. The result is a capex cycle that is real but invisible in the headline indices.
- Automation capex: broad-based
- Energy resilience: post-2022 priority
- AI-enabled production: rising rapidly
- Export competitiveness: gradually improving
How to play it
The listed beneficiaries are the suppliers — automation equipment makers, industrial software vendors, energy infrastructure providers. Direct exposure to the Mittelstand requires unlisted vehicles.
What still doesn't work
The large-cap auto value chain is still under pressure. Chemicals are mixed.
What this implies for the DAX
The headline index is not the right expression. The MDAX and the small-cap segment are.
Mittelstand capex intentions
| Quarter | Net capex intentions index |
|---|---|
| Q4 2024 | -8 |
| Q2 2025 | +3 |
| Q4 2025 | +11 |
| Q2 2026 | +18 |
The German industrial reset is happening, just not where the headlines are looking.
Frequently asked questions
Is this offsetting DAX weakness?
Partially.
How do you play it?
Automation suppliers, MDAX, unlisted vehicles.
What's the risk?
Energy price reversal, China demand.
The bottom line
The Mittelstand is investing. The DAX is restructuring. Both are real; the headlines see only one.
