GERMAN companies, which have been struggling for months with high inflation, fluctuations in energy prices and geopolitical instability, are quite pessimistic about 2024 and do not expect a recovery, a survey by a German institute seen by Reuters showed today.

According to a survey conducted by the German Economic Institute (IW), based in Cologne, among more than 2,200 companies, only 23 percent of companies expressed optimism about next year, while 35 percent had negative expectations. The situation has worsened particularly in the construction and industrial sectors, the institute found.

Only 20 percent of companies expect to hire more people next year

The long period of job creation in Germany has probably come to an end for now, and only 20 percent of companies expect to hire more people next year, compared with 35 percent expecting less hiring, IW said. The survey signaled a “continuation of the state of economic shock in Germany”, and business expectations returned to levels recorded in the autumn of 2022.

The sharp rise in energy prices caused by Russia's invasion of Ukraine, the related overall increase in prices, geopolitical uncertainties and the evident weakening of the dynamics of the global economy explain the economic stagnation in this country, said institute researcher Michael Groemling.

36 percent plan lower spending on investments

The survey also showed the consequences for investments, since only 27 percent of companies plan higher investments next year, while 36 percent plan lower spending on investments. The survey also highlighted difficulties in the German industrial and construction sectors. Namely, only a quarter of industrial companies expect an increase in production, as opposed to 38 percent of companies that expect a decline in production.

Among construction companies, meanwhile, only 13 percent expect an increase in production, while more than half of the companies, or 54 percent of them, expect a decline, the survey showed.

Source: index.hr