German Companies Cautious on Investments, DIHK Survey Shows
Investments are being withheld by corporations, according to DIHK. - Companies reluctant to invest due to uncertainties
German companies are hesitant to increase investments, with only a quarter planning to do so, according to the German Chamber of Industry and Commerce (DIHK). In contrast, one-third of businesses intend to reduce their investments, as revealed in a letter from DIHK CEO Helena Melnikov. Less than one in five companies anticipate expanding their capacities, Melnikov describing the figures as concerning.
The DIHK's latest business survey, released on Tuesday, highlights significant hurdles for Germany as a business location, including high energy costs and taxes, excessive bureaucracy, and lengthy planning and approval processes. This follows two consecutive years of recession, with stagnation of gross domestic product expected for the current year.
Unpredictable trade policies of U.S. President Donald Trump constitute a major risk, while the new federal government has announced measures to boost the economy and encourage companies to invest more in Germany. Melnikov emphasizes that stimulating economic growth requires increased investments.
Many companies are wary of both domestic and foreign demand, as well as energy and raw material prices, and labor costs, which pose significant investment barriers, according to the survey. The unstable global economic and geopolitical environment also adds to the un certainties faced by businesses with international footprints.
German companies have traditionally been reluctant to invest due to these factors, and the DIHK's survey reflects ongoing concerns. The survey reveals that the current business situation is rated worse than in previous surveys, with economic policy uncertainty emerging as the largest business risk. Companies face significant pressure from rising wages and energy prices, which reduce profitability and dampen investment appetite.
While sluggish growth in both domestic and export markets discourages expansion plans, the latest DIHK data available for this analysis is from 2024–2025. If data for 2021 specifically is required, it is likely that similar themes—including pandemic-related uncertainty, supply chain disruptions, and global demand weakness—were also reported at that time.
- The economic policy uncertainty, coupled with rising wages and energy prices, continues to be a significant investment barrier for German companies, as shown in the DIHK's employment policy for 2024-2025.
- Despite the new federal government's measures to boost the economy and encourage investments, the industry, finance, and business sectors remain cautious, according to the DIHK's community policy, with one-third of businesses planning to reduce their investments.
