Germany's leading publicly traded companies are facing a tough year due to a sluggish economy and geopolitical uncertainties. Despite these challenges, the DAX companies managed a 4.2% profit increase in 2024, with a modest 0.3% revenue rise, driven by a strong final quarter.
Notably, MTU Aero Engines and Rheinmetall reported significant revenue growth of 38% and 36%, respectively. However, the automotive sector struggled, and job cuts were seen for the first time in years, with a 0.5% reduction in employment among the top 40 companies.
The financial package from Germany's Union and SPD has potential for boosting growth, but immediate impacts are unlikely. Companies continue to focus on cost-cutting to withstand international competition and market weaknesses, especially in China.
While Europe showed a 2.3% revenue increase, Asia experienced an 8.2% decline, highlighting regional disparities. The situation presents a chance for Europe to leverage its strengths, according to EY's Henrik Ahlers, despite the ongoing economic pressures.
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