Economic survey
Pessimism prevails in the German economy
Where is the German economy headed after the second year of recession in a row? Many associations are looking ahead with concerns. The reasons are varied.
High costs, a lot of bureaucracy and crises everywhere you look: the mood in the German economy has reached a low point. Business associations generally assess the current situation to be worse than it was a year ago, and pessimism dominates when looking ahead to 2025.
“The current economic situation has rarely been so worrying. We have known a number of crises over the past 100 years, but none have been as complex with as many causes as the one we are in now,” summarizes Michael Hüther, director of the employer-related German Economic Institute (IW), summarizes the results of his company’s annual survey among large industry associations.
Whole bunch of problems
At the turn of the year 2024/2025, 31 of the 49 associations surveyed rated the current situation in their industry as even worse than a year ago. Just four economic sectors reported an improvement within a year: waste disposal, insurance, trade fairs and real estate.
“Labor, materials and energy are expensive here, excessive bureaucracy is paralyzing, the uncertain situation on the world market is weakening exports, and the political chaos at home is weakening investments,” said Hüther to the German Press Agency. “The next federal government faces the major task of creating a sustainable economic perspective.”
A predominantly bleak view of 2025
Looking ahead to the new year, there are more optimists and fewer pessimists compared to the previous survey. However, the pessimists still predominate. 20 of the 49 business associations expect a decline in production in their area in 2025, 13 assume the values will remain the same, and 16 expect more production.
According to the IW researchers, the overall rather poor mood will have an impact on the labor market: 25 associations expect job cuts in their industries in the coming year, only 7 industry associations expect more employees. These include the pharmaceutical industry and aircraft and spacecraft construction, as well as service providers such as shipping companies. There are likely to be fewer jobs, for example, in the iron and steel industry, in mechanical engineering, in the automotive industry or in construction.
Press releases IW Cologne IW association surveys
dpa
Source: Stern
