New govt in Germany yet to lead to optimism among domestic bizs: DIHK

The Fall 2025 business survey released by the German Chamber of Industry and Commerce (DIHK) reflects expectations of around 23,000 firms from all sectors and regions.

DIHK chief executive Helena Melnikov said in Berlin that the situation did not improve in the summer, and instead, “the sentiment deteriorated slightly once again.”

She said the momentum needed for a real recovery in the German economy is lacking, and DIHK projects stagnation for German gross domestic product (GDP) this year, and only a 0.7-per cent growth next year.

Structural problems continue to be a major hindrance for companies, while rising social security contributions and the recent rise in the minimum wage significantly hit the situation, she was cited as saying by a DIHK release.

She said corporate investments are still 10 per cent below pre-pandemic levels, even though it has been five years since the start of the coronavirus pandemic.

She urged the government to control costs like social security, significantly reduce bureaucracy and implement a promised electricity tax reduction, not only for industry but for all businesses.

DHK estimates a 1-per cent decline in exports this year due to US tariffs, which comes after a 2.1-per cent drop last year, while next year is expected to bring a slight rise of 0.5 per cent.

The DIHK’s confidence index, measuring the current economic situation and the participating companies’ business expectations, declined by 1 point to 93.8. Out of 23,000 firms surveyed, 15 per cent expect the economic situation to improve in the next 12 months, while 27 per cent think it will get worse.

Some 22 per cent of the respondent firms plan to raise investments and 31 per cent plan to reduce, while only 11 per cent plan to boost their workforce. Twenty-four per cent think about layoffs, and 56 per cent of the companies see labour costs as one of their biggest business risks.

Meanwhile, the German economy shrank by 0.2 per cent in the second quarter after a 0.30-per cent growth in the first, avoiding a recession and seeing stagnation in the third quarter. High energy costs, weak global orders and high US tariffs are the most pressing issues against growth.

ALCHEMPro News Desk (DS)