For an extended period, service providers managed to withstand the weak economic conditions. However, the crisis now fully impacts them. This is evidenced by a special evaluation conducted as part of the DIHK mid-summer 2026 economic survey, where more than 11,000 service companies were questioned about their economic status.

“Service providers across industries currently face existential threats. Immense documentation obligations, rigorous bureaucratic requirements, and rising labour costs pressurise enterprises significantly. Immediate relief is crucial.”

“Structural challenges, elevated energy prices, and geopolitical uncertainties now hit service providers with full force,” noted Dirk Binding, DIHK Division Head of Digital Economy, Infrastructure, Regional Policy. “Many service companies, ranging from logistics, advertising to IT, operate for industrial and commercial clients. When these suffer, the ripple effect eventually reaches the service providers as well.” Personal services like healthcare, tourism, culture, and transportation are also coming under increased pressure. “Weak purchasing power and consumer uncertainties depress demand,” explained Binding. “Adding to the burden, escalating energy and raw material costs due to the conflict in the Middle East also impact service providers harshly.”

Many small enterprises struggle with financial difficulties

The economic climate has noticeably worsened compared to the year's beginning: Only 27% of enterprises rate their current condition as good, while 23% deem it poor. Business prospects have also darkened considerably, where around 31% anticipate further deterioration and a mere 13% foresee improvements. Consequently, firms are more cautious about hiring or investing plans: Over one in five companies intends to reduce personnel, and approximately one in three plans to scale back investments.

Small enterprises are particularly entrenched in financial issues. Nearly half of service firms with up to ten employees report problematic financial conditions. About 22% face liquidity shortages. “Many small businesses have exhausted their financial reserves during the past crisis years, leaving little room to absorb steep cost increases,” added Binding.

Gloomy business prospects across all service sectors

A closer glance at the different service sectors unveils the most severe downturn in travel agencies – predominantly attributable to the Middle Eastern conflict and its repercussions. Even the previously stable health and social services sector evaluates its situation negatively despite high demand since the year's start. These entities face substantial cost and structural pressures: 61% of businesses cite elevated labour costs as their primary business risk. Meanwhile, staff scarcity remains a pressing challenge for 62% of businesses.

The transportation sector currently deals with the longstanding issues of bottlenecks, deteriorating infrastructure, and skilled labour shortages alongside surging energy costs. Expectations are equally pessimistic here, with the most negative outlook observed in taxi and bus operators heavily reliant on petrol and diesel prices. For airlines, soaring jet fuel costs and looming concerns around prolonged airspace closures in the Gulf region temper enterprise expectations.

In the hospitality sector, enterprises are particularly burdened by heightened energy and personnel expenses. As a result, this sector views both its current business situation and prospects unfavourably. Tangled in financial challenges, roughly two-thirds of hospitality firms classify their financial standing as problematic, and one in ten even reports looming insolvency. Despite the impending summer season, employment aspirations within the sector lag behind those seen earlier in the year.

“Service providers across industries currently face existential threats. Immense documentation obligations, rigorous bureaucratic requirements, and rising labour costs pressurise enterprises significantly. Immediate relief is crucial,” Binding stated. Moreover, the weekly maximum working hour legislation outlined in the coalition agreement needs swift implementation. “Rigid working hours no longer suit the realities of many enterprises, particularly in the hospitality sector. Businesses require enhanced flexibility to adapt to fluctuating demand and deploy staff accordingly.”

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