06.11.2025 – The hoped-for recovery is yet to materialize: The German economy continues to stagnate, with pessimistic opinions prevailing among businesses. This is demonstrated by the DIHK Economic Survey Autumn 2025, which reflects the business situation and outlook of around 23,000 companies across all industries and regions. "The situation did not improve during the summer months; on the contrary, sentiment has slightly deteriorated further," said DIHK Chief Executive Helena Melnikov while presenting the results on Thursday (06.11.2025) in Berlin. The DIHK Sentiment Index fell by one point to 93.8, remaining clearly in pessimistic territory. The DIHK Sentiment Index is an average of businesses' assessments of the economic situation and their expectations.

Only 15% of businesses expect an improvement in the economic situation over the next twelve months, while one in four anticipates a deterioration. Assessments of the current business situation remain subdued: a quarter of businesses rate it positively, while as many say it is negative. Despite new economic policy initiatives and reform announcements, the mood in the business sector remains downbeat.

"The government has identified the right issues but has not yet developed the necessary impact," said Melnikov. "After three years of no growth, we need more than symbolic policies." Businesses are still waiting for noticeable relief and tangible improvements in their everyday operations.

"Lacking momentum for real recovery"

"Based on these figures, we expect economic output to stagnate this year, with only minimal growth of 0.7% in 2026," said Melnikov. "That does not constitute a meaningful recovery. What is still missing is the necessary momentum to drive us higher and further."

Structural problems continue to hinder businesses: 56% identify labour costs as one of their biggest business risks, a record high. "Rising social contributions and the recent increase in the minimum wage are having a noticeable effect, particularly in labour-intensive sectors such as hospitality," said Melnikov.

Domestic demand (58%) and economic policy conditions (57%) are also still perceived as significant burdens. "To finally get back on track, we now need sustainable reforms: Costs must come down, speed must go up," demanded Melnikov.

Investment downturn, industry under pressure

Businesses are becoming increasingly cautious: only one in five plans to increase investment, while one in three intends to reduce it. "Five years after the pandemic began, corporate investments are still about 10% below pre-crisis levels," said Melnikov. "Given that 85% of yearly investments in Germany come from the private sector, this is an alarming signal."

Employment prospects are also dimming: only one in ten companies intends to hire more staff, while one in four plans to cut jobs.

The situation is particularly critical in the industrial sector: one-third of businesses rate their business situation as bad, while only one in five reports it as good. High labour and energy costs, heavy tax burdens, and weak export prospects weigh on sentiment. "Our industry is losing its foundation. Many businesses are responding with rationalisation or relocating production," said Melnikov.

Global headwinds and domestic challenges

The international environment is also adding pressure. Global trade is at risk of stagnation, while competitors in Asia are gaining momentum. "In such an environment, competition becomes even tougher," Melnikov noted.

Policy must now steadfastly continue its reform course: "The way out of the crisis is arduous and challenging, achievable only through concrete reforms," said Melnikov. "The current initiatives by the government are heading in the right direction but are still insufficient. Businesses now need noticeable relief and reliable framework conditions. This requires, above all, consistent bureaucracy reduction. The key points paper adopted by the cabinet must be implemented quickly and supplemented with further measures. Everything that hinders and impedes needs to be scrutinised. Furthermore, the promised electricity tax reduction for everyone must no longer be postponed. Urgent action is also needed to provide better incentives for employment, and the rise in social contributions must be addressed. Only then can the economy restart."