Handelsblatt20 minutes agoBusiness1 min readGermanyView original

Bert Rürup: German companies are achieving records, but the location is in crisis

While the DAX companies are targeting net profits of almost 122 billion euros, corporate bankruptcies and job cuts are increasing.

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The DAX companies expect net profits of almost 122 billion euros this year, while at the same time corporate bankruptcies are increasing and thousands of jobs are being cut every month in the industrial sector.

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Why It Matters

DAX companies are recording high net profits, while the broader German business location is suffering from insolvencies and job cuts.

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Dusseldorf. The DAX companies are expected to report net profits of almost 122 billion euros this year, around ten percent more than last year. Of the 40 listed companies, 14 are likely to achieve the highest annual profit in their history this year, analysts expect.

Even the three ailing car companies can expect a total profit of eleven billion euros. Presumably no DAX company will report losses in 2026. So it's not surprising that the German stock index surpassed its previous record high from the end of August on Thursday morning, even if things went downhill after that.

The data contrasts with the predicament of Germany as a location. The number of corporate bankruptcies will reach long-term highs this year; The economic research institute IWH expects almost 5,000 bankruptcies in the third quarter, the second highest level since 2005.

Many companies are implementing tough austerity programs. Around 10,000 industrial jobs are lost every month and the number of employed people and those subject to social security contributions is falling. However, the number of unemployed people is likely to rise more slowly because more and more unemployed people are reaching retirement age - and the state and health sector continue to increase staff.