Industr y Exhibits Positive Outlook Amid Persistent Negative Feelings Among Various Businesses - DHK Reports - Persistent Unhappiness Persists in Many Businesses - Industry Offers Optimism
Germany's Economic Prospects Remain Pessimistic, DIHK Reports
The German Chamber of Commerce and Industry (DIHK) has released a new survey revealing a persistent level of pessimism among Germany's businesses. DIHK Managing Director, Helena Melnikov, cited several factors contributing to this outlook.
Although business sentiment improved slightly in the spring survey compared to the beginning of the year, it remains overall "pessimistic," as stated by Melnikov. Predications show that 26 percent of companies view the future unfavorably, while only 16 percent are optimistic about their prospects - a two-percentage-point increase from the previous survey.
The survey revealed that a quarter of companies rated the current situation as good, while an equal number saw it as poor. This, according to Melnikov, represents the poorest assessment of the situation since the onset of the Coronavirus pandemic.
The DIHK attributes this poor sentiment to several factors: a weak domestic economy, reduced foreign demand, and ongoing challenges such as skilled labor shortages, increasing labor costs, and persistently high energy and raw material prices.
However, there is hope on the horizon, particularly in the industry and construction sectors, where signs of recovery are emerging. These sectors may once again serve as driving forces of the economy. Nevertheless, Melnikov emphasizes that clear signals from federal politics are necessary for this recovery to take hold.
She called for faster approval and planning procedures, lower energy costs, and streamlined bureaucracy to create a more hospitable environment for businesses. The DIHK also expressed concern over potential U.S. tariff increases, which could negatively impact the German economy.
The DIHK surveyed around 23,000 businesses from various sectors and regions between late March and late April. The new federal government was not yet in place during this period. The survey findings indicate that German exports are projected to decline by 2.5 percent in 2025, marking a third consecutive year of contraction.
Despite these challenges, Melnikov remains optimistic and urged governmental interventions to support businesses and stimulate economic growth. She emphasized the need for prompt and concrete policy measures to address economic concerns before the summer break.
- The persistently negative employment outlook in EC countries, as reflected in the DIHK survey, is due, in part, to ongoing challenges such as skilled labor shortages and increasing labor costs in Germany's industry and business sectors.
- For a sustainable recovery and growth in employment across EC countries, it is crucial that the federal government provides clear signals, streamlines bureaucracy, reduces energy costs, and expedites approval and planning procedures, creating a more conducive business environment.
