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Central Germany’s Economy Stalls as Businesses Demand Immediate Reforms

Sentiment gains remain marginal with costs and regulatory hurdles keeping investors on hold.

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Overview

  • The Konjunkturklima-Index for Central Germany’s commercial sector rose to 32.4 points in June from 31 a year ago but stays far below its 2018 high of 89.
  • Surveys of more than 147,000 regional firms indicate widespread declines in sales and profits driven by growing cost pressures.
  • High location and labor expenses along with bureaucratic hurdles are cited as key factors discouraging new investments.
  • Companies report only slight improvements in mood since spring 2024 with no clear sign of an economic turnaround.
  • Local business chambers are calling for swift action on energy cost reductions, bureaucratic relief and enhanced support for job seekers.