The mood in the German economy remains gloomy: the mood is also poor in most sectors at the turn of the year, according to a survey by the German Economic Institute. Industry associations were asked about the current situation, the prospects for planned investments and job opportunities.
Overall, it shows: “The German economy is deep in crisis.” 31 out of 49 business associations would describe the current situation as “worse” compared to the previous year. The reasons given for this are high costs for energy, labor, materials and excessive bureaucracy. These would put such a strain on companies that they would hardly be able to keep up with international comparisons. In addition, the uncertain world situation is inhibiting exports, while the “political chaos in your own country” is restricting investments: “Those who do not know where politics is heading in the next few years are less likely to invest in new machines, technologies or vehicles.”
This negative mood is also likely to have an impact on the labor market: almost half of the associations surveyed expect job cuts in the coming year. Only seven industry associations expect more employees.
Only 16 of the 49 companies expect an increase in the coming year: Among the optimists are companies from the energy and water industries, the pharmaceutical industry, paper mills and logistics.
“The German economy will not get anywhere in 2025 either,” says IW director Michael Hüther. “What is particularly worrying is the multitude of problems that companies are facing.” Previous crises often had direct triggers, were less extensive and therefore easier to manage – now the situation at home and abroad is uncertain. “The coming federal government must create a sustainable economic perspective again. This is the only way we can catch up with our competitors again.”