The road to recovery is slow at best: the economy has a long way to go
© Josh Hawley / Moment / Getty Images
The hoped-for turnaround has not materialised: the German economy continues to tread water. Pessimistic voices still predominate in companies. This is shown by the economic survey for fall 2025 conducted by the German Chamber of Commerce and Industry (DIHK), which reflects the business situation and expectations of around 23,000 companies from all sectors and regions.
Helena Melnikov
© DIHK / Christian Kruppa
"The situation did not improve during the summer months; on the contrary, the mood has deteriorated slightly once again," said DIHK Chief Executive Helena Melnikov when presenting the results on on 6 November 2025 in Berlin.
The DIHK sentiment index fell by one point to 93.8 points, remaining clearly in the pessimistic range. The DIHK sentiment index is an average of the assessment of the economic situation and business expectations of the companies surveyed.
Only 15 per cent of companies expect the economic situation to improve in the coming twelve months, while one in four companies expects it to deteriorate. Assessments of the current business situation also remain subdued: a quarter of companies rate it positively, while just as many rate it negatively. Despite new economic policy initiatives and announcements of reforms, the mood in the economy remains subdued.
"The government has identified the right issues, but has not yet developed the necessary clout", says Melnikov. "After three years without growth, we need more than symbolic politics." There is still a lack of tangible relief and concrete improvements in the everyday life of businesses.
"Based on these figures, we expect economic output to stagnate this year and only minimal growth of 0.7 per cent in 2026", says Melnikov. "That is not a real upturn. We still lack the momentum needed to take us higher and further."
Structural problems continue to slow down businesses in particular: 56 per cent of businesses see labour costs as one of their biggest business risks, a new record high. "Rising social security contributions and the recent increase in the minimum wage are having a noticeable impact, especially in labour-intensive sectors such as the hospitality industry", says Melnikov.
Domestic demand (58 per cent) and economic policy (57 per cent) continue to be perceived as significant burdens. "In order for things to finally start looking up again, sustainable reforms are needed now: costs must come down and the pace must pick up", demands Melnikov.
Companies are becoming increasingly cautious: only one in five plans to increase investment, while one in three wants to cut back. "Five years after the start of the pandemic, corporate investment is still around ten per cent below pre-crisis levels", says Melnikov. "Given that 85 per cent of annual investment in Germany comes from the private sector, this is an alarm signal."
Employment prospects also continue to deteriorate: only one in ten companies wants to increase staffing levels, while one in four wants to cut jobs.
The situation is particularly critical in the manufacturing industry: one-third of companies rate their business situation as poor, while only one in five rate it as good. High labour and energy costs, a high tax burden and weak export prospects are weighing on sentiment. "Our manufacturing industry continues to lose substance. Many companies are responding with rationalisation or production relocation", says Melnikov.
The international environment is also creating additional pressure. Global trade is threatened with stagnation, while competitors in Asia are gaining momentum. "In such an environment, competition will become even tougher", says Melnikov.
Politicians must now consistently pursue their reform course: "The path out of the crisis is arduous and rocky, and it can only be achieved through concrete reforms", says Melnikov. "The initiatives taken by the federal government so far are a step in the right direction, but they are not enough. Companies now need tangible relief and reliable framework conditions. Above all, this includes consistent bureaucracy reduction. The key issues paper adopted by the cabinet must be implemented swiftly and supplemented with further measures. Anything that hinders or slows down progress must be reviewed. The promised reduction in electricity tax for all must not be delayed any longer. Better incentives for employment are equally urgent, and to achieve this, politicians must get rising social security contributions under control. Only then can the economy get back on track."
The full results of the survey can be downloaded here:
