German Business Outlook Remains Grim as 25% of Companies Expect Worsening Conditions

The latest economic forecast by the German Chamber of Commerce (DIHK) reveals a bleak outlook for businesses in Germany early in 2026. Approximately one-quarter (25%) of the 26,000 companies surveyed expect their business conditions to worsen, underscoring widespread pessimism despite some slight improvement in overall sentiment.

Germany's economic growth remains stagnant at just 0.2%, a stark contrast to the robust recovery seen globally. DIHK CEO Melnikov attributes this stagnation to persistently high energy prices and an uncertain economic policy framework, which companies identify as the main obstacles to growth. Melnikov criticized government efforts as delayed and insufficient, emphasizing an urgent need for stronger reforms to put the economy back on a growth trajectory.

This tense mood is compounded by external global challenges, including geopolitical tensions in the USA, Ukraine, and China, which continue to weigh heavily on German companies’ confidence.

Voicing skepticism toward optimistic assessments, Ulrich Flatken, CEO of Mecanindus Vogelsang Group—a maker of metal parts for industrial and automotive sectors—said he cannot detect any true signs of improvement in the business environment. Drawing on decades of industry experience, Flatken insisted the company still faces persistent challenges that prevail despite narratives about better times ahead.

In summary, while the German business community sees some mild positive shifts, a large segment remains deeply concerned about worsening conditions amid unresolved structural issues and external uncertainties. This highlights the ongoing struggle to revive Germany’s economy in early 2026.