Entrepreneurs expect a further deterioration in the EU’s largest economy, according to an industrial group
© Getty Images / audioundwerbung
Businesses in Germany are slashing their investment plans and freezing hiring as they see no evidence of a “self-sustaining” recovery in the EU’s leading economy, a survey conducted by the Association of German Chambers of Industry and Commerce (DIHK) showed this week.
The poll found that over half of the 24,000 companies questioned view Germany’s economic policy as a business risk, with concerns also mounting in industry.
“We see no sign of a self-sustaining upswing so far,” DIHK Managing Director Martin Wansleben said in a statement. “On the contrary, companies have revised their investment plans, which are important for this, and their hiring intentions downward – both into negative territory.”
Only 13% of the firms polled expect an uptick in the next 12 months, while 35% are bracing for the situation to deteriorate, and expect the German economy will continue to decline throughout next year.
The DIHK survey highlighted the prices of energy and raw materials as the biggest threats facing German businesses, while a lack of qualified workers and weak domestic demand were also seen as major challenges for companies in the future.
READ MORE: Germany maintaining gas trade with Russia – Bloomberg
The German economy hasn’t been growing for more than a year, with economists pointing to a recession in the six months through December due to the energy crisis, weak Chinese demand and soaring interest rates.
Researchers at the DIHK downgraded their previous May forecast of zero growth in Germany this year and now expect a 0.5% contraction, followed by no growth in 2024. Although more pessimistic than the government’s latest estimates, it matches an outlook put out earlier this week by S&P Global which revealed private-sector activity contracted at a steeper pace this month than in September.
For more stories on economy & finance visit RT’s business section
