German business associations pessimistic about 2025, IW says

BERLIN (Reuters) – German business associations see their current situation as worse than it was a year ago and remain pessimistic about the coming year, according to a survey published by the employer-oriented German Economic Institute IW on Friday.

“The German economy won’t get off the ground in 2025 either,” said IW Director Michael Huether.

The survey showed that 31 out of 49 business associations see the current situation as worse than in 2023 and 20 out of 49 industry representatives expect lower production next year, while only 16 expect an increase.

High costs for energy, labour and materials, in addition to excessive bureaucracy, are weighing on companies and making it difficult for them to keep up with the international competition, IW said.

The uncertain global situation is hampering exports, while political chaos at home is dragging on investment, the institute added.

The poor mood threatens to impact the labour market in particular: half of the associations surveyed expect job cuts in their sectors in the coming year, while only 7 associations expect employment to increase.

There are likely to be fewer jobs in industry in particular, for example in the iron and steel, mechanical engineering and construction sectors, IW said.

(Reporting by Maria Martinez, Editing by Friederike Heine)