Economic associations in Germany rate the prospects for the coming year as poor. This is evident from a survey by the Institute of the German Economy (IW) published on Friday.
According to the IW, 31 of 49 economic associations describe the current situation as worse than a year ago. The reasons are diverse: high costs for energy, labor, materials, and excessive bureaucracy burdened the companies and made it so that they can hardly keep up with international competition. The uncertain world situation, as the IW’s respondents say, hampers exports, and the political chaos in one’s own country hampers investments – who does not know where the policy is heading in the next few years, invests less in new machines, technologies, or vehicles.
Looking at the coming year, the associations remain pessimistic: 20 of the 49 respondents from the surveyed industries expect a decrease in production, while only 16 expect an increase. The optimists include companies from the energy and water industry, the pharmaceutical industry, the paper mills, and the logistics sector.
The poor mood, according to the survey, will primarily affect the labor market: 25 associations expect a job cut in their industries for the coming year, while only seven expect more employees. The pharmaceutical industry, the aerospace industry, and the investment sector are among those that expect more jobs. There will likely be fewer jobs, especially in the industry, for example in the iron and steel sector, the machine industry, or the construction sector.
“The German economy is not getting back on track in 2025 either” said IW Director Michael Hüther. “Especially alarming is the multitude of problems that companies are confronted with.” Previous crises often had direct triggers and were less far-reaching and therefore easier to overcome – now the situation is uncertain both at home and abroad. “The next federal government must create a sustainable economic perspective again. Only then will we find our way back to our competitors” said Hüther.