Bavaria's economy at its lowest point: cancel public holidays for an upswing?

Bavaria's economy at its lowest point: cancel public holidays for an upswing?

Bavaria's economy is currently showing stagnating tendencies, which poses major challenges for both companies and political decision-makers in the region. According to Wolfram Hatz, President of the vbw – Association of Bavarian Business e.V., the economic situation has not improved since autumn 2024. The current “Weißbier Index” is constantly at 78 points, which is well below the normal level of 100, and demonstrates the ongoing stagnation of the Bavarian economy. Circle Messenger reports a decrease in production volume in industry and construction of around 5% compared to the first months of last year.

The increase in unemployment is particularly worrying – 11,000 new unemployed people were added in Bavaria between January and April 2025. Although sales in the catering industry continue to decline, wholesale and retail sales recorded increases. Nevertheless, the overall forecast for 2025 remains pessimistic as structural problems and stagnating demand are weighing on companies.

Stabilization measures

In this context, Hatz is calling for a fundamental policy change in order to initiate an economic awakening in Bavaria. The vbw has put together a package of measures to support the new government under CDU leader Friedrich Merz, which includes, among other things, degressive special depreciation, lowering energy prices, reducing bureaucracy and making working hours more flexible. Hatz emphasizes that the high energy and labor costs as well as the burden of taxes and duties represent a serious problem for companies. In addition, Bavaria's economy is suffering from the USA's erratic trade policy, which makes a new negotiated solution and free trade agreement necessary. Press portal reports that all sub-indices of the Weissbier Index are below normal levels.

Another suggestion from Hatz concerns working time regulations. In order to increase competitiveness, the vbw president speaks out against increasing the minimum wage to 15 euros and instead suggests eliminating one or more public holidays. However, opinions in this regard among the population and among employees are divided.

Economic future prospects

In view of the critical situation, reference is also made to the need to address Germany's location problems. This includes overcoming high energy prices and reducing bureaucratic hurdles that companies often find to be a hindrance. In this context, Hatz emphasizes that it is crucial to create suitable framework conditions in order to secure the future viability of the Bavarian economy.

Overall, the current situation shows that, despite slight signs of an increasing order situation since the beginning of the year, the Bavarian economy needs to be addressed seriously. The vbw calls for a decisive political reaction in order to meet the challenges of the present time.