Overview
- Of 46 associations surveyed, 22 expect workforce reductions in 2026, nine foresee hiring, and 15 anticipate unchanged headcounts.
- Investment plans stay weak, with only 11 associations expecting higher capex, 14 planning cuts, and 21 projecting stagnation at low levels.
- Production sentiment turns slightly positive for the first time in years, as 19 groups expect higher output versus nine seeing declines.
- Bright spots include aerospace and shipbuilding tied to higher defense outlays and a services sector reporting better conditions than last year.
- IW’s Michael Hüther says the economy is stabilizing at a lower level as protectionism, weak exports, and high domestic costs weigh, with separate forecasts pointing to 0.8%–1.4% GDP growth in 2026 largely from state spending.