“The economic flashlight is going out again” – every third company expects job cuts in 2027

According to a survey, companies in Germany are not expecting an upturn next year, despite recently better business. “The flash in the pan of the economy will go out again next year,” said the economic head of the German Economic Institute (IW), Michael Grömling, to the “Rheinische Post”.

The institute surveyed a good 1,000 companies in October - the result: "Private companies in the German economy remain in the longest phase of negative expectations since 2005 - and that in terms of production, employment and investments," as Grömling explained. Germany should not hope for improvement from outside. It is now all the more important to implement the planned reforms.

32 percent of companies therefore assume that their employment will fall in the coming year. In the comparable survey in the spring it was 29 percent, a year ago it was 36 percent. Only 17 percent of the companies surveyed are currently planning to have a larger workforce in 2027.

Production expectations have not improved either. 80 percent of companies expect to produce less or around the same amount in 2027 as they did this year. The industry performs better here than the overall economy, the service sector and the construction industry. There, the proportion of companies with negative expectations fell sharply from 15 to 5 percent. Almost 23 percent, a similar number to the spring, expect an increase in production.

39 percent want to invest less

According to the survey, 39 percent of companies want to invest less in 2027 and only 25 percent want to invest more. The tendency is strongest among commercial service providers, where 27 percent are planning more investments. In the construction industry, however, 44 percent want to invest less.

The IW is financed by business and employer associations as well as individual companies. According to its latest forecast, the institute assumes that the German economy will grow by 1.2 percent this year.

It has forecast gross domestic product growth of just under one percent next year. This would at least overcome a “prolonged state of shock,” it was said in September. But there remained a lot of unpredictability.