Economic crisis: This is how experts want to strengthen confidence in companies!

Economic crisis: This is how experts want to strengthen confidence in companies!

The economic conditions in Germany are currently having a major impact on companies’ decisions. How die-deutsche-wirtschaft.de reported, uncertainty among companies is increasing, which has a negative impact on corporate confidence. According to the IW spring 2025 economic survey, around 2,000 companies rate various factors influencing their confidence.

The experts Prof. Dr. Hubertus Bardt and Prof. Dr. Michael Grömling from the German Economic Institute (IW) have found that there is a historically high level of uncertainty and poor corporate expectations. Expectations regarding bureaucracy are particularly important here: 75 percent of companies consider a fundamental reduction in bureaucracy and regulations to be highly influential.

Key factors for business confidence

Other significant factors in this survey include moderate labor cost trends and general economic policy. Around 66 percent of companies expect positive effects from moderate developments in these areas. In addition, 61 percent of companies see the influence of general economic policy as very important. There is a high level of support for government action, particularly with regard to competitive energy prices and investment and innovation-friendly tax policies.

Almost half of the companies cite the improved export prospects to Asia and the USA as a decisive factor, while a stabilization of international supply and production relationships is viewed positively by almost 80 percent of the companies. However, there are differences between the sectors: industrial companies rate improved sales prospects abroad as particularly important, while service providers value better financing conditions.

The role of investment decisions

A central aspect of economic growth is the investment decision. These decisions are prepared using various investment accounting methods. How mueller-consulting.jimdofree.com explained, the investment methods include both static and dynamic procedures. These methods help companies to simulate the economic success of an investment and to use their own financial resources efficiently.

What is crucial is the ranking of the alternatives, which is determined within these methods. Consistent results from multiple procedures lead to clear decisions, while different results may cause narrow evaluations of options. The use of testing methods secures decisions and checks the likelihood of different results if circumstances change.

Companies also have to deal with one-time expenses and ongoing income or expenses. The capital value method and the amortization comparison method are particularly important here. The capital value method determines the present value of the income minus the acquisition costs, while the amortization comparison method shows the time until the investment costs are amortized.

However, it is criticized that investment calculations usually only take monetary aspects into account, while other motives, such as environmental protection, are not taken into account. Utility value analysis can be an effective method here because it also includes soft factors in the decision-making process and thus enables a more holistic view.

In summary, it can be said that the challenges for companies in Germany are characterized by external influences and internal decision-making processes. Through targeted reforms and measures, a new federal government could help to strengthen business confidence and advance economic development, which is currently slowed by uncertainty.