Business Situation: Decline of 7 Points

The service sector was long seen as the stabiliser of the German economy, proving less vulnerable to economic fluctuations than industry — until now. In the DIHK Economic Survey Early Summer 2026, however, only 27 percent of surveyed service companies now rate their current business situation as good; 23 percent classify it as poor. As a result, the balance of the current situation plummets from 10 points at the start of the year to just 3 points.

Business Expectations Drop by 10 Points

Even more dramatic is the outlook: 31 percent of companies expect a deterioration over the next twelve months, while only 13 percent anticipate an improvement. The expectation balance has collapsed from minus 8 to minus 18 points.

The causes of this development include the persistent weakness in industry, the geopolitical shock of the Middle East conflict with its consequences for energy prices and travel flows, and noticeable caution among private households in terms of consumption.

Based on this, the DIHK calls for targeted economic policy measures, particularly to relieve energy costs, simplify bureaucratic requirements, and strengthen domestic demand.

"Structural challenges, high energy costs, and geopolitical uncertainties are now hitting the service providers with full force."

Small Businesses Without Cushion

The service sector is strongly characterised by micro-enterprises. Businesses with up to ten employees report particularly difficult conditions (situation balance minus 5 points), with many having largely depleted their financial reserves during the crisis years since 2020. Nearly half of the micro-enterprises in the service sector are in a problematic financial situation: 22 percent report liquidity problems and 26 percent face reduced equity.

Sector Analysis

Hospitality: Record Overnight Stays, but Losses

The hospitality sector reveals a notable gap between its tourist appeal and economic reality: Around 500 million overnight stays were recorded in Germany in 2025, with another record expected for 2026. Yet real revenue in the hospitality sector was 2.2 percent below the previous month's figures in March 2026. The situation balance drops to minus 17 points and expectations to minus 23 points.

Major risks identified by the industry are energy costs (85 percent) and labour costs (75 percent)—well above the cross-industry averages of 70 and 57 percent, respectively. Sixty-five percent of hospitality businesses face a problematic financial situation, with every tenth company reporting imminent insolvency.

Travel Brokerage: Shockwaves from the Middle East

Travel brokerage sees the sharpest downturn in the entire service sector. The balance of the current situation has shifted from plus 20 to minus 22 points, while the expectation balance stands at minus 49 points. The Middle East conflict, along with associated energy price surges, triggered a wave of cancellations. Major flight hubs in the Gulf region are operating with restrictions or full closures, extending travel routes to Asia and cancelling entire destinations. Order books for 2026 remain empty.

Transport Industry: Legacy Problems and Energy Shocks

In the transport industry, the balance of the current situation worsens from minus 9 to minus 15 points. On top of longstanding issues like dilapidated infrastructure and staff shortages that have burdened the sector for years, soaring fuel prices now add significant pressure. The taxi sector is hit hardest, with the balance of the situation at minus 31 points, and coach charter services where the balance plummets from plus 23 to minus 21 points. The aviation sector remains in marginally positive territory at plus 2 points but has lost 21 points since the previous survey. Closed airspace over several Gulf states forces detours on key Asia routes.

Cultural and Creative Industries: Structural Crisis Meets Economic Crisis

The cultural and creative sectors are simultaneously battling cyclical and structural burdens. The balance of the current situation sank from plus 3 to minus 8 points, with the expectation balance at minus 18 points. Digital platforms now account for roughly three-quarters of digital advertising investments and nearly half of all advertising revenue in Germany. For the media and film industries, the employment balance stands at minus 26 points. Regional media diversity is also being lost: in nearly half of Germany’s districts, there is now only one economically independent local newspaper.

Business-Related Services: Major Risks Include Demand and Material Costs

The business-related services sector is cooling off (situation balance: 10 down from 15 points). Employment agencies (minus 25 points), advertising and market research companies (minus 10), and the leasing industry (minus 7) as leading indicators of industrial demand are particularly hard-hit. Slightly brighter sentiments can be seen in sub-sectors such as legal and accounting services (46 down from 50 points), architectural and engineering firms (18 down from 26), research and development enterprises (18 down from 21 points), and the security industry (5 improving from minus 3 points).

Across many sectors, including telecommunications, IT services, or consulting, companies identify weak domestic demand as the central issue. Others cite high energy and material costs—for example car rentals, cleaning services, or in gardening and landscaping. 

Download

This "DIHK Economic Insight" with further details is also available for download in PDF format: 

(only available in German)