Companies have significantly reduced their investment plans. This is evident from the Ifo business climate surveys published on Friday.
The Ifo investment expectations for the current year have fallen to -9.0 points in November, after -0.1 points in March. “Due to structural location problems and high uncertainty about the economic policy framework, companies are holding back on their investments” said Ifo Business Cycle Expert Lara Zarges. Even for the year 2025, companies plan fewer investments, but the balance of -6.6 points suggests a less pronounced decline than this year.
In the manufacturing sector, companies have significantly reduced their investment expectations for the current year. The balance fell from 1.4 points in March to -8.8 points in November. Non-energy-intensive industries are investing more cautiously, with the balance falling from 0.3 points to -11.6 points. “Electrical equipment manufacturers are particularly pessimistic” Zarges said, with expectations falling to -21.0 points, after -8.4 points in the spring. Machinery manufacturers are also slowing down their investments, from 7.5 points to -6.2 points.
This is also the case for the automotive industry, which corrected its expectations from 1.3 points in March to -10.5 points in November. In contrast, expectations in energy-intensive industries rose for the current year from -4.3 points in March to -2.6 points in November, particularly in the chemical industry, which increased its investment expectations from 3.1 points to 12.6 points.
For the coming year, companies in non-energy-intensive industries remain pessimistic, but the balance has slightly increased to -8.4 points. The automotive industry, in particular, does not plan to reduce its investments further (-0.4 points). In energy-intensive industries, a larger proportion of companies (-4.5 points) expect a decline in investments in the coming year, while the chemical industry’s expectations are again negative (-2.6 points).
Trade is investing particularly cautiously. For the current year, the balance fell from -13.3 points to -15.0 points. In the coming year, companies plan even less to invest (-18.0 points). Service providers have also adjusted their plans for the current year, from 2.5 points to -7.5 points. In the coming year, they plan to reduce their investments slightly less (-3.0 points).