German Business Community Pessimistic for 2025

According to a survey published by the employer-oriented German Economic Institute IW, German business associations view their current situation as worse than a year ago and continue to be pessimistic about the coming year. IW Director Michael Huether stated, “The German economy will not be able to recover even in 2025.”

The survey revealed that 31 out of 49 business associations see the current situation as worse than in 2023, with 20 out of 49 sector representatives expecting a decline in production next year, while only 16 anticipate an increase. IW noted that high energy, labor, and material costs, along with excessive bureaucracy, are putting pressure on companies and making it difficult for them to keep up with international competition.

The institute added that the uncertain global situation is hindering exports, while political chaos domestically is reducing investments. The adverse conditions are particularly threatening the labor market: half of the associations participating in the survey expect layoffs in their sectors next year, while only 7 associations anticipate an increase in employment. IW indicated that there will be fewer job opportunities, especially in industries such as steel, mechanical engineering, and construction.