More than one in three German companies expected to reduce the number of jobs by 2025, according to a study by (IW) in which he warns of a “deep crisis.”
Although there is some hope in the services sector, industry and construction are still particularly pessimistic, it is added in the study released this Friday to which more than two thousand companies were interviewed.
“More than one in three companies expects to invest less this year than in 2024, and about 35% of companies plan to reduce jobs (…) if we ask national companies, this situation won’t change anytime soon,” he can read.
The IW admits that since the fall of 2023, companies’ expectations have been “dark”, with the worst results since the worldwide financial market crisis to be recorded in late 2024.
“Although balance, that is, the difference between optimists and pessimists, has improved in the spring of 2025, the prospects for this year remain dark. The mood is particularly weak in the sectors of construction and industry. Only in the service sector there were more optimistic than pessimists at the beginning of the year,” it is added in the study.
Economists warn that US President Donald Trump should further aggravate the situation.
“The fact that Donald Trump and his administration are currently imposing fees on global trade is causing additional problems on German industry. Although current, and still clear tariff regulations, they were not active at the time of the inquiry (in March), the export climate was already poisoned beforehand,” he is written in the survey.
“The tariff war is putting huge pressure on everyday business,” says IW economic director Michael Grömling.
“Donald Trump’s whims arrive at an inopportune height and are a severe test for the German economy. The new German government should take on close coordination with the European Union (EU) in order to give companies as stability as possible in these times of uncertainty,” he says.
Germany has gradually freed its dependence on Russian gas after Vladimir Putin’s Russia invaded Ukraine in 2022, and since then Europe has suffered two consecutive recessions, and has been walking to stagnation this year.
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