If you are waiting for a recovery in the German economy, you should stop reading. The German economy is at a complete standstill. And the future prospects are not much better.
This is shown by a new economic survey from DIHK, the German Chamber of Industry and Commerce, which represents around three million companies across the country. Only one in four companies describes its situation as good, while just as many describe it as directly bad.
Growth this year is expected to land at zero, and next year only a modest increase of 0.7 percent is predicted. German companies particularly point to weak demand, high energy and labour costs, and heavy bureaucracy as the biggest barriers to progress.
Small bright spots
The industry, Germany's economic engine, is coughing and sputtering. The automotive and chemical sectors are experiencing declining exports, while retail continues to struggle with consumer restraint. Only a few sectors, such as energy and parts of the construction and service sectors, show small bright spots.
According to DIHK, more companies plan to cut back on investments and employees in the coming months. The mood is described as “predominantly gloomy”, and the business community still sees Germany as an expensive and cumbersome place to do business.
DIHK concludes that the country is “on an uneven path out of the crisis” with weak growth, faltering competitiveness, and a business sector still searching for signs of a new upturn.
