According to a recently unpublished economic survey by the Institute of the German Economy (IW), the willingness of German companies to invest remains low. The survey, which sampled nearly 1,000 businesses across various sectors, revealed that current reports indicate that one in five companies has completely stopped making investments. The IW characterizes this trend as the “longest period of investment weakness in Germany.”
When asked about the main obstacles, companies cited high labor costs (77 percent), regulatory burdens (69 percent), high taxes (66 percent), and energy costs (65 percent). While the authors acknowledge that recent geopolitical uncertainties have influenced the current results, they believe these findings primarily reflect structural issues within Germany’s economic landscape.
Although two-thirds of the investing companies (67 percent) allocate their spending solely within Germany, the study’s authors caution that this is not necessarily proof of the country’s overall attractiveness. They point out that smaller businesses often invested domestically due to a lack of alternative options, primarily aimed at maintaining competitiveness. In contrast, larger corporations were significantly more inclined to shift their investments overseas.
