Prolonged Economic Weakness Deepens Concerns for German Mid-Sized Businesses

A new survey reveals worsening business sentiment, driven by declining demand, labor shortages, and excessive bureaucracy.

A survey of over 1,000 mid-sized German companies shows that 27% expect their business situation to worsen in the next six months, while only 20% anticipate improvement.
Key challenges include declining orders, underutilized production capacity, and a persistent shortage of skilled workers, with many firms holding back on investments.
Labor reductions are expected, especially among larger mid-sized firms and businesses in eastern Germany, with major corporations like Airbus, ZF, and Bosch also announcing significant layoffs.
82% of respondents cite excessive bureaucracy as their most pressing issue, alongside concerns about the retirement of Baby Boomer employees exacerbating the labor shortage over the next decade.
Despite challenges, analysts highlight the resilience and stronger equity positions of mid-sized companies, which could help them navigate the current economic difficulties.