German companies aren’t seeing any evidence of an pickup taking hold in Europe’s biggest economy, according to a survey conducted by the DIHK business lobby.
The group, whose full name stands for the Association of German Chambers of Industry and Commerce, said responses from among the 21,000 firms questioned revealed a notable lack of momentum after two quarters of no growth at all.
“Companies have shown remarkable resilience despite persistently high energy prices, rising interest rates and the war in Ukraine,” Ilja Nothnagel, DIHK’s chief executive officer, said in a statement on Monday. “However, the outlook for the next 12 months remains murky — especially since incoming orders are noticeably decreasing on the demand side.”
The group maintained a prediction for zero growth in 2023, an outlook that’s more pessimistic than the 0.2% expansion forecast last Monday by the European Commission.
The report kicks off a week of focus on the health of the German economy, with surveys of purchasing managers and the Ifo institute’s gauge of business confidence due in coming days and broadly predicted by economists to show deterioration.
Then on Thursday, a second estimate of gross domestic product will show if unexpectedly weak industrial production pushed the country into a recession in the first three months of the year. Most economists still reckon the economy stagnated rather than shrank.
Along the way, the Bundesbank will release its monthly report on Wednesday that may update investors on its view of growth, while its president, Joachim Nagel, will deliver key speeches this week too.
The DIHK survey showed that prices of energy and raw materials remain the biggest risk for companies, while a shortage of skilled workers is the next-highest danger. That, along with inflation, means that more than half of respondents saw labor costs as a threat too.
“In view of the aging of society, the lack of qualified workers will remain one of the main structural challenges for companies in the future,” Nothnagel said.
