German companies are increasingly struggling to predict their business development. According to a survey conducted by the Ifo Institute and published on Tuesday, 28.3 percent of the companies surveyed in April said that this was “difficult” – compared to 24.8 percent in March. The responses are seen as an indicator of economic uncertainty. The indicator thus reached its highest level since November 2022. “More and more companies are currently operating in the dark when it comes to their own future” said Klaus Wohlrabe, head of the Ifo surveys. “The main driver is the escalating trade conflict with the USA. Positive impulses such as the recently negotiated coalition agreement of the new government have not yet been able to offset this.” Wohlrabe added that companies urgently need predictability. “The longer the uncertainty persists, the more investment and new hires will be postponed.”
Uncertainty is particularly pronounced in the industry, where the share increased by about eleven percentage points to 38.7 percent. It is becoming increasingly difficult for companies in almost all sectors to predict their own development. The electrical industry and the automotive sector are particularly uncertain with more than 45 percent. About a third of the companies in the retail sector reported a difficult situation.
Among the service providers, uncertainty is less pronounced. The share of 21.6 percent has hardly changed. Only in the main construction sector has uncertainty decreased. While 26.3 percent reported in March that they were unable to predict their own business development, it was now 23.2 percent. The reason for this could be the infrastructure package that is on the horizon.