The German economy is in the doldrums, especially industry groans. This could cost numerous people the job this year.
More than three out of ten companies in Germany assume that they will reduce jobs this year. In an economic survey by the employer -related institute of the German Economy (IW) in Cologne, 35 percent of the companies replied that they assumed a reduction in employment in 2025. However, only 24 percent planned to hire more employees. In March and April 2025, the IW surveyed around 2,000 companies on their business expectations.
In the same survey last autumn, the entrepreneurs were even more pessimistic: At that time, 38 percent planned with employment reduction and only 17 percent with a structure.
The proportion of pessimistic companies in industry was particularly high in the current spring survey: 42 percent expect to have to reduce jobs in the course of this year (job structure: 20 percent). In the service industry, on the other hand, it was only 21 percent (structure: 36 percent).
Geopolitical conflicts weaknesses global economy
“German industry is still suffering from the geopolitical conflicts and the associated weaker global economy,” the study said. “The imponderables of the new US government tighten this.” High energy, regulation and labor costs also weaken competitiveness and thus the German foreign business of companies.
In the survey period, none of the customs regulations – which had already been relatively unclear and already changed several times, “the export climate was already poisoned,” says the statement on the study. “The customs war is enormous,” says IW economic chief Michael Grömling. “(US President) Donald Trump’s moods come to a wrong place and are a hardness test for the German economy.”