The German economy is enveloped in a wave of pessimism, grappling with recessionary pressures. High costs, burgeoning bureaucracy, and a slew of global crises have compounded the challenges, particularly affecting industries like iron and steel, mechanical engineering, automotive, and construction. Only four sectors—waste disposal, insurance, trade fairs, and real estate—report any improvement.
This economic malaise has prompted 25 industries to anticipate job cuts, whereas only seven, including pharmaceuticals, aerospace, and freight forwarding, foresee employment growth. Economists predict that 2025 will bring further production declines for 20 sectors, with a mere 16 expecting an upswing.
The current scenario is deemed 'alarming' by IW director Michael Hüther, who underscores the complex nature of the crisis. As Germany braces for continued economic strain, the next political administration faces the formidable task of crafting a sustainable economic framework. Efforts to mitigate the impact must address high energy and labor costs and streamline regulations to restore competitiveness. The outlook remains bleak, with expectations of diminished revenues and job reductions across major corporations, exacerbated by weak domestic performance and insufficient external stimuli, particularly from Asia.
