DIHK Economic Survey: Third consecutive year of crisis looms in 2025

"Over the next twelve months, significantly more companies continue to expect business to get worse than better", said DIHK Managing Director Helena Melnikov on the occasion of the publication of the results on 13 February in Berlin. 

"We must be prepared for economic output in Germany to fall for the third time in a row in 2025. Based on the data, it is becoming increasingly clear how deep the structural crisis is: 60 percent of companies see the economic policy framework conditions as their greatest business risk – a negative record." According to Melnikov, it is therefore all the more urgent "that politicians use their realignment after the general election to finally provide clear impetus for growth again".

Based on the results, the DIHK expects gross domestic product to shrink by 0.5 percent for the year as a whole. "After 2023 and 2024, we are heading for the third consecutive year of recession in 2025 – the longest period of weakness in Germany's post-war history," warns the DIHK Managing Director. "This is a turning point and emphasises the acute need for action." 

It is worrying that the usual indicators for an upturn are also failing to materialise – investments and exports in particular are falling. Reluctance is particularly high in industry: Only 22 percent of companies are planning more investment, while almost 40 percent are cutting back. "Instead of investing in innovation and growth, many companies are focussing solely on replacement investments – a clear alarm signal for the competitiveness of our location," warns Melnikov. "If this trend continues, Germany is at risk of further deindustrialisation."

Export expectations also remain gloomy

28 percent of companies expect exports to fall over the next twelve months, while only 20 percent expect sales to other countries to rise. "Declining competitiveness and increasing protectionism are threatening export-orientated German industry, which has always been a driver of economic growth," says DIHK Head of Foreign Trade and Chief Analyst Volker Treier. "This means that Germany's business model is facing a test." 

The current survey shows no change in the business situation compared to last autumn. 26 percent of companies report a good situation, 25 percent a bad one. The situation in industry remains particularly gloomy. As in the previous survey, only 19 percent of companies there rate their current business situation as good, while a third rate it as poor.

Caught in a vicious circle

Companies' business expectations also remain almost unchanged at the beginning of the year. A third of companies expect the situation to deteriorate. The proportion of companies that expect business to improve over the next twelve months has risen only slightly to 14 percent. "If this trend continues, Germany is at risk of further deindustrialisation." 

"While there used to be ups and downs in the economy, the trend has now been pointing downwards for seven years. We've never seen this before. The economy is caught in a vicious circle of excessive bureaucracy, poor framework conditions, weak demand and high costs."

The poor economic development and companies' gloomy business expectations have now also affected the labour market. Only 12 percent of companies are planning to increase their workforces in the coming months, while almost one in four (22 percent) are expecting fewer employees. 
Employment plans are particularly weak in industry, where almost one in three companies are cutting staff and only 11 percent intend to hire. "This means that the threat of job cuts is most evident in the manufacturing sector among all economic sectors," says Treier. "The times when at least the labour market was still stable are over."

Time for a new dawn

For DIHK Managing Director Helena Melnikov, the current economic data emphasises the enormous pressure to reform: "Things can't go on like this. Politicians must finally give companies the signal that their concerns are being taken seriously and that the pressing problems are being tackled with determination." 

This includes less bureaucracy, affordable energy, a functioning infrastructure and a competitive tax burden. "The German economy needs an environment in which it can realise its full potential again. This is the only way to create growth, jobs and prosperity.  The future German government must prioritise attractive and reliable framework conditions – because without economic strength there is no stable future." 

The complete economic survey can be downloaded here: 

DIHK Economic Survey February 2025  (PDF, 654 KB)