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Karlsruhe: Economy will continue to nosedive in autumn 2025!
Karlsruhe, October 22, 2025: IHK survey shows economic pressure with falling orders and increased costs. Corporate optimism remains muted.
Karlsruhe: Economy will continue to nosedive in autumn 2025!
The economic situation of regional companies in Karlsruhe will remain tense in autumn 2025. According to the Karlsruhe Chamber of Industry and Commerce, the current economic survey shows mixed results and the hoped-for upturn in sentiment has failed to materialize. IHK President Volker Hasbargen says that although the business situation is assessed positively, it is the worst assessment in five years. The prevailing economic uncertainties, customs conflicts and increasing costs are placing considerable strain on companies.
In figures, the IHK economic climate index shows a decline from 106 to 102 points. Companies' long-term investment and employment plans remain tense. While 52% of companies rate their overall situation as satisfactory, the proportion of companies with a poor situation increases by 2 percentage points to 21%. Hasbargen is calling on the federal government to be more decisive in economic policy in order to help companies.
Current challenges
The challenges faced by companies are diverse. 66% of companies rate weak domestic demand as the biggest challenge, followed by rising labor costs (55%) and a shortage of skilled workers (51%). In addition, 39% of companies see high energy prices as a risk, while geopolitical tensions worry 35% and economic policy conditions concern 34% of those surveyed. This is also reflected in personnel planning: only 10% of companies plan to create new positions, while 26% fear that they will not be able to maintain their workforce.
Sales development remains declining and the order intake balance has fallen from minus 7 to minus 10 points. There is a positive business balance, particularly in the service sector and construction, but it is at a lower level. Retail is also declining, while wholesale is coming under increasing pressure. Companies are becoming more pessimistic in their business expectations; the balance drops from plus 1 to minus 2 points.
Looking into the future
Companies are cautious about the next twelve months, even if expectations are more optimistic than last year. Only 18% of companies are optimistic about the future, a decrease of 3 percentage points. The investment balance only improves marginally, which underlines the existing uncertainty. The main motives for investments are the replacement of existing systems (65%), digitalization (49%) and rationalization measures (35%).
In a broader context, other surveys, such as the DIHK's flash survey on transatlantic trade relations, show that German companies must expect further disruption to trade despite an agreement in the customs dispute between the EU and the USA. The research situation shows a consistently pessimistic tendency among German companies, which also points to the existing challenges in the areas of training and a shortage of skilled workers. The IHK emphasizes the urgency of action on the part of politicians to improve the economic conditions and strengthen the competitiveness of regional companies.
Current forecasts for gross domestic product (GDP) assume growth of 0.0% for 2025, while forecasts for 2026 range from +1.0% to +1.7%. The fluctuating forecasts highlight the uncertainties that influence government planning, particularly with regard to the budget.