One in three German companies plans to cut investments, survey shows

Nearly one in three German companies intends to slash investments despite mounting signs of recovery in Europe's biggest economy, according to a survey by the German Chamber of Commerce and Industry (DIHK) published on Thursday.

The data showed that less than one in four companies is looking to raise investments, a prospect that DIHK chief executive Helena Melnikov described as worrying.

"Only one in five manufacturing businesses plans to expand capacity - only half as many as in 2018," the chamber said.

According to the survey, when businesses do invest, the funds are primarily channelled into replacing machinery and plants rather than into product innovation or additional capacity.

"As long as private companies do not invest more again, neither more growth nor new jobs will be created," said Melnikov. 

The German economy unexpectedly grew in the third quarter despite the impact of the war in Iran, with gross domestic product (GDP) expanding by 0.2% quarter-on-quarter.

Germany's GDP grew by just 0.2% in 2025, following two consecutive years of contraction, but the government is more optimistic regarding 2026, having recently raised its forecast to 1.3% growth.

The DIHK also raised its forecast for 2026 from 0.3% growth to 1%, but cautioned that this assessment was based on billions in government debt taken on to boost the economy.

"This growth has been bought with taxpayers' money and new public debt. State aid must not obscure the deep structural problems of Germany as a business location," said Melnikov. "Anyone who wants sustainable growth again must release the brakes on investment and innovation."

Businesses continue to struggle with higher energy prices caused by the Iran war, as well as high raw material and labour costs, she said. 

Only around one in 10 companies intends to create new jobs, while one in four said it will have to cut jobs, according to the survey.