German Business Associations Pessimistic About Growth

BERLIN (Reuters) – German business associations perceive their current situation as worse than a year ago and remain pessimistic about the upcoming year, according to a survey published by the employer-oriented German Economic Institute (IW) on Friday.

IW Director Michael Huether stated, "The German economy won't get off the ground in 2025 either."

The survey indicated that 31 out of 49 business associations view the current situation as worse than in 2023. Additionally, 20 out of 49 industry representatives foresee lower production next year, while only 16 predict an increase.

High energy, labor, and material costs, alongside excessive bureaucracy, are burdening companies and hindering their ability to compete internationally, according to IW.

The uncertain global situation is stifling exports, and political turmoil at home is affecting investment, the institute noted.

This bleak outlook threatens to affect the labor market significantly: half of the associations surveyed anticipate job cuts in their sectors over the next year, while just seven associations foresee an increase in employment.

Specifically, job reductions are likely in the industrial sector, including iron and steel, mechanical engineering, and construction industries, as reported by IW.