German Economy Faces Decline with Rising Insolvencies and Job Cuts

Economic indicators show a struggling industrial sector, weak consumer confidence, and increasing unemployment as businesses brace for continued challenges.

Germany's economy is projected to shrink for the second consecutive year, with weak exports and domestic demand contributing to the downturn.
The Ifo employment barometer fell to its lowest point since 2020, reflecting a rise in planned job cuts, particularly in the industrial and retail sectors.
Corporate insolvencies have surged, with November seeing a 12.6% year-over-year increase, and experts predict the highest annual total since 2009 by the end of 2025.
Consumer sentiment shows slight improvement heading into January 2025, but remains far below pre-pandemic levels due to high energy costs and job security concerns.
Despite a reduced demand for labor, 43% of businesses still report difficulties in filling positions, highlighting ongoing structural challenges in the labor market.