Researchers survey gloomy outlook among most German companies

Only a small minority of German companies are confident about the coming year, despite slightly better economic prospects, according to a survey published on Monday.

The Munich-based ifo institute said that just under 15% of companies expect their situation to improve in 2026.

A sizeable majority, 59%, do not expect any change, and 26% a deterioration.

"Companies remain very cautious. There is no sign of optimism anywhere," said ifo survey director Klaus Wohlrabe.

The economic research institute questions several thousand companies every month for its economic surveys. In industry, the most important sector of the German economy, the proportion of optimistic companies is slightly higher than average at 18.2%.

The mood in the construction industry, on the other hand, is gloomier, with a third (33.2%) of companies expecting their situation to deteriorate.

Only 10.3% of businesses in the sector expect business to improve – even though the federal government is planning extensive investments.

"Those figures are surprising in that the industry could actually be hopeful about the announced infrastructure package"’ said Wohlrabe.

Pessimism is similarly widespread in the retail sector, where 32.5% expect business to be worse in 2026.

Economic research institutes including ifo, and the German central bank all expect the German government's economic stimulus package to lead to some growth in economic output in 2026 and 2027 after three years of stagnation.