DIHK Reports

The key findings of the DIHK Economic Survey February 2024

• The negative sentiment among businesses is solidifying.
• Business expectations remain bleak. Over a third of all companies (35 percent) have negative business expectations for the next twelve months. Only one in seven (14 percent, up from 13 percent previously) expects better business. Overall, business expectations increase only slightly by one point to minus 22.
• Companies still rate their current business situation slightly positively: 29 percent (down from 30 percent previously) describe the current business as "good," 21 percent (down from 22 percent previously) as "bad." The balance of the situation rating drops again from nine to seven points. This is significantly below the long-term average of 21 points.
• However, contrary to the trend in the overall economy, large companies with more than 1,000 employees are developing positively: here, the balance of the situation rating increases from 16 to 23 points. Expectations also brighten significantly and improve by seven points to zero. They benefit from significantly improved export expectations, given a surprisingly resilient development of the global economy: the balance of export expectations of exporting large companies in the industry increases by 14 to 23 points. In contrast, the export expectations of the entire export industry brighten less strongly and are still predominantly pessimistic (balance increases by eight to minus seven points).
• Risks and uncertainties remain high. On average, companies tick more than three (3.1) out of a total of eight different business risks in our survey. Before the pandemic, the average was 2.4.
• More than half cite energy and commodity prices (currently 60 percent compared to 61 percent in autumn 2023), economic policy framework conditions (57 percent compared to 51 percent previously), skills shortages (56 percent compared to 58 percent), domestic demand (55 percent compared to 53 percent), and labor costs (stable at 53 percent, a record high) as the biggest business risks.
• More than 7,600 companies have used the opportunity of free-text responses regarding economic policy framework conditions. By far, the most frequently mentioned keyword is "bureaucracy." Approximately 41 percent of the free-text responses contain bureaucracy-related topics, whereas in the previous survey, it was "only" 38 percent.
• Forecast: Given the overall gloomy outlook and weak start to the year, the DIHK also expects a decline in economic output by 0.5 percent this year. This would mark the second phase with two consecutive years of recession in post-war German history (lastly in 2002/2003).