Rising Economic Stability Concerns Among German Companies in Late 2025

Recent data from the ifo Institut reveal increasing economic survival worries among German businesses towards the end of 2025. According to the survey, 8.1% of companies in Germany now fear for their existence, up from 7.3% in October 2024, signaling growing instability in the corporate sector.

Klaus Wohlrabe, who leads the ifo Institut's survey efforts, cautioned that a high level of insolvencies may persist due to factors such as lack of new orders, weak demand, and intensifying international competition. These issues are prominently affecting various sectors differently. The retail industry faces the greatest strain, with 15% of retailers reporting serious economic difficulties. Meanwhile, the service sector is also feeling amplified pressure, as the share of companies reporting distress has increased by nearly two percentage points to 7.6% compared to last year.

On a more positive note, some sectors exhibited modest improvements: the industrial sector’s share of companies facing economic crisis declined slightly from 8.6% to 8.1%, and the construction sector showed a decrease from 7.9% to 6.3%. This suggests some resilience amid broader economic challenges.

The Munich-based ifo Institut conducts these monthly surveys among thousands of companies to monitor economic conditions closely. The latest results underscore the uneven impact of current economic headwinds across Germany’s corporate landscape, highlighting particular vulnerability in retail and service areas while others stabilize marginally.

Wohlrabe’s outlook points towards continued caution as insufficient demand and competition pressures are likely to keep insolvency risks elevated in the near term.