Expectations of German Companies for 2026: Pessimistic Outlooks

Pessimistic Expectations from German Companies

A new survey conducted by the Ifo Institute for Economic Research has revealed the expectations of German companies for the year 2026. The results indicate that concerns are prevalent, especially in the business world.

Cynical Expectations

According to the survey, only 14.9% of German companies anticipate that their business will improve in 2026, while 26% believe that the current economic situation will worsen. 59% do not expect any changes.

Sectoral Situation Analysis

In the industrial sector, 26.5% of companies foresee a deterioration in business conditions. In the retail sector, this figure is recorded at 32.5%, while in the services sector, 14% expect improvement, and 23.2% anticipate worsening conditions.

The situation in the construction sector is even more pronounced; here, 33.2% of companies expect negative conditions. Only 10.3% hope for better business, while 56.5% do not expect any changes.

Expert Opinion: “No Optimism”

The head of the Ifo Macroeconomics and Research Center, Klaus Wohlrabe, stated that there is no optimistic spirit in the sector, saying, "There is no spirit of optimism anywhere. Virtually no sector offers any real hope for 2026."

Infrastructure Investments and Economic Recession

The German government is promising hope for the economy with a 500 billion euro infrastructure package. However, current data shows that these investments have not yet increased enthusiasm. The economy grew by 0.3% in the first quarter of 2023, contracted by 0.2% in the second quarter, and recorded zero growth in the third quarter.

While the German government promises to rescue the country from recession through significant increases in infrastructure and defense spending, it is assessed that the effects of these measures will take longer than expected.

Expectations for Next Year

The government has updated its growth forecast for 2025 to 0.2%, projecting 1.3% growth for the economy with the support of public spending and 1.4% growth for 2027.