Pessimism in the German economy: experts warn of a crisis!

The mood in the German economy has reached a low point. According to a recent survey conducted by stern.de was published, many business associations are looking to the future with great concern. The reasons for this pessimism lie in high costs, a lot of bureaucracy and global crises. Of the 49 associations surveyed, 31 rate the current situation worse than last year. Only four economic sectors, including waste disposal, insurance, trade fairs and real estate, report an improvement.

Michael Hüther, director of the German Economic Institute (IW), describes the current situation as worrying and complex. The next federal government faces the challenge of creating a sustainable economic perspective. Compared to the previous survey, the number of optimists for 2025 has increased, but pessimists still predominate. 20 of 49 business associations expect a decline in production in the coming year. 13 associations assume that the values ​​will remain the same, while 16 predict an increase in production. The forecast for job cuts is also worrying: 25 associations expect a decline in employment, while only seven expect more employees. Among the industries that could cut jobs are iron and steel, mechanical engineering, automotive and construction. However, positive things are being reported from the pharmaceutical industry, aircraft and spacecraft construction and freight forwarding companies.

Economic challenges and crisis awareness

The German economy is not only confronted with challenges at the national level, but is also experiencing an economic downturn. In a report by world.de points out various factors that contribute to the current situation: interest rate increases, a weakening global economy and uncertainties following a budget compromise. Rainer Dulger, President of the Employers, describes the situation as a serious economic crisis, while DIHK President Peter Adrian speaks of difficult times for the German economy. Forecasts for 2023 indicate a decline in economic output, while only minimal growth is expected for 2024.

Companies hesitate to make investments because there is a lack of planning. A survey by the IW found that 23 of 47 business associations expect a decline in production or business activity. 15 sectors expect economic activity to remain the same, while nine expect higher production levels. Adrian calls for more planning security and warns of a continuation of the recession. The industry is described as being in a critical situation by Siegfried Russwurm, President of the Federation of German Industries. Despite a shortage of skilled workers, employment problems persist in several sectors.

Dulger calls for a change of course by the federal government and an “Agenda 2010 moment” to promote Germany's competitiveness. He draws attention to the high energy costs, taxes, duties and wages compared to other European countries. He also emphasizes the need to remedy the educational situation and reduce bureaucracy. Adrian calls for a change in economic and location policy. While some government decisions on planning, approval and infrastructure development are viewed positively, Dulger warns of declining investment decisions in favor of foreign countries. More and more medium-sized companies are relocating their production abroad due to unattractive conditions in Germany.