Between 1964 and 1990, Luxembourg experienced a period of profound economic transformation, as its traditional industrial base—especially steel—faced growing challenges, while new sectors such as finance and logistics began to take root. This transition laid the foundation for the modern, diversified economy Luxembourg is known for today. 

By the mid-1960s, steel production was still the dominant force in Luxembourg’s economy. Companies like ARBED were major employers and exporters, and the country maintained a strong reputation as a steel producer in Europe. However, global shifts in demand, rising competition, and technological changes began to erode the profitability of traditional steelworks.

The 1970s oil crises and the resulting global economic slowdown further pressured the industry. In response, Luxembourg’s government introduced strategic industrial policies, aiming to stabilize employment and restructure the steel sector. This included partial nationalization, state investment, and gradual modernization of facilities.

As industrial production began to stagnate, logistics emerged as a growing sector, benefiting from Luxembourg’s central location in Europe and improving infrastructure. In the 1970s and 1980s, the government invested in: 

• Expanding the road network to improve cross-border connectivity
• Modernizing the rail system under the national CFL (Société Nationale des Chemins de Fer Luxembourgeois)
• Developing intermodal transport options to connect road, rail, and air cargo more efficiently

This era also saw the growth of international freight companies and early signs of Luxembourg’s potential as a European logistics hub—especially in air cargo, which would later be centered around Luxembourg Findel Airport.

Realizing the vulnerability of a mono-industrial economy, Luxembourg actively pursued economic diversification. By the 1980s, the financial sector had overtaken industry in terms of GDP contribution. This shift influenced logistics development, as banks and multinational companies required advanced transport and communication infrastructure. Additionally, warehousing, freight forwarding, and customs handling became more professionalized, setting the stage for the logistics boom in the decades to come. 

This transition came with social costs. Thousands of jobs were lost in the steel sector, particularly during the 1970s and early 1980s. To manage the shift, the government implemented retraining programs, promoted foreign investment, and encouraged employment in emerging sectors such as IT, finance, and logistics services.