Change of government has no effect: Why the mood in the economy remains gloomy.

The German Association of Chambers of Industry and Commerce (DIHK) anticipates a long and difficult road out of the economic crisis. Only 15 percent of businesses expect an improvement in the economic situation over the next twelve months, according to a new business climate survey. One in four companies expects a deterioration. "The mood has not improved since the government took office; on the contrary, it has slightly dampened," said DIHK Managing Director Helena Melnikov in Berlin.

Chancellor Friedrich Merz (CDU) had hoped for a swift change in the economic climate when he took office in May – this has obviously not happened.

The German Chamber of Industry and Commerce (DIHK) is more pessimistic about its economic outlook than the German government, forecasting only minimal growth of 0.7 percent for 2026. The German government and leading economic research institutes, however, expect GDP to increase by 1.3 percent next year, following stagnation this year.

Melnikov attributed the worsened forecast to weak export prospects and companies' reluctance to invest. "What isn't invested today won't be there tomorrow." According to a survey of 23,000 businesses across all sectors, only one in five companies plans to increase investments, while one in three intends to cut them. There is hardly any investment in new machinery, equipment, or vehicles, and virtually no investment in expanding capacity or in product innovation. Melnikov described this as a warning sign.

Companies lack planning certainty. Structural problems continue to be the main obstacle for businesses: According to a survey, 56 percent see high labor costs as one of their biggest business risks – a record high. Melnikov made it clear that, in her view, the federal government is on the right track. However, measures already adopted, such as tax relief, have not yet reached businesses. The government needs to accelerate the pace of these relief measures.

Melnikov cited two measures that could bring about a change in the business climate. One would be to lower the electricity tax for everyone. The CDU, CSU, and SPD had announced this in their coalition agreement, but due to budgetary constraints, only a permanent reduction in the electricity tax for industry was ultimately agreed upon. This caused considerable disappointment, especially among small and medium-sized enterprises (SMEs). "The repercussions are still being felt today," she said.

Electricity costs in Germany are three to four times higher than in the USA and twice as high as in France. The industrial electricity price planned by the government does not cover the broader economy.

RND/dpa