German businesses cut down investment plans, freeze hiring due to uncertain economic recovery
Date
10/30/2023 3:07:57 AM
(MENAFN) According to a study this week by the Association of German Chambers of Industry and Commerce (DIHK), businesses in Germany are cutting down on their investment plans and hiring freezes because they do not perceive any signs of a "self-sustaining" recovery in the leading Economy in the EU.
According to the survey, concerns over Germany's economic policies are growing among industry, with more than half of the 24,000 firms surveyed viewing them as a risk to their operation.
"We see no sign of a self-sustaining upswing so far," DIHK Managing Director Martin Wansleben stated in a declaration. "On the contrary, companies have revised their investment plans, which are important for this, and their hiring intentions downward – both into negative territory."
A mere 13 percent of surveyed firms anticipate any improvement in the coming 12 months, whereas 35 percent are preparing for a worsened economic situation and foresee continued decline in the German economy throughout the next year.
The survey conducted by the DIHK underscored the escalating prices of energy and raw materials as the primary threats looming over German businesses. Additionally, the scarcity of qualified workers and sluggish domestic demand were identified as significant challenges for companies in the foreseeable future.
For over a year, the German economy has remained stagnant, and some economists have attributed the lack of growth to a six-month recession leading up to December. This downturn has been attributed to factors such as the energy crisis, diminished Chinese demand, and surging interest rates.
Researchers at the DIHK have revised their previous forecast from May, which predicted zero growth for Germany this year, now projecting a 0.5 percent contraction in the economy, followed by an anticipated zero growth in 2024.
While this outlook appears more pessimistic than the government's latest estimates, it aligns with a recent analysis by S&P Global, which revealed that private-sector activity contracted at a more pronounced rate this month than it did in September.
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