Business uncertainty among companies in Germany has increased noticeably over recent weeks. According to the latest Ifo Business Climate Survey, in March, 78.6 percent of firms found it difficult or quite difficult to assess their future business development, up from 75.4 percent in February. This indicator for economic uncertainty reaches its highest level since February 2024. Klaus Wohlrabe, head of the Ifo surveys, noted, “The war in Iran has markedly increased uncertainty in the German economy. For many companies, the consequences for their own operations are currently hard to calculate”.
Uncertainty is particularly pronounced in the manufacturing sector, where 87.7 percent of businesses are affected. This figure has remained above 80 percent since October 2021, reflecting the ongoing structural challenges facing the industry. Uncertainty levels are exceptionally high in energy-intensive industries: the chemical sector reports at around 95 percent, while manufacturers of rubber and plastic goods report at 93.9 percent.
In the services sector, uncertainty saw a marked rise, increasing from 66.6 percent to 72.0 percent. Transportation and logistics were hit particularly hard, with 88.1 percent of companies reporting planning difficulties, up from 82.7 percent in February. In retail, uncertainty remains at a high level (84.4 percent, slightly up from 84.1 percent). The construction industry reports a level of 73.4 percent, up from 71.9 percent the previous month. Wohlrabe added, “Companies are currently facing numerous risks-ranging from rising energy prices to potential supply chain disruptions. The longer the uncertainty persists, the more pressure it puts on investment and growth”.
