According to the survey, which interviewed 2,000 companies in October, 36% of the businesses plan to cut jobs next year, while only 18% will create new positions.
The situation is more severe in the industry sector, where 41% of respondents anticipate a reduction in the workforce, whereas only one in seven intends to hire personnel.
Regarding production, three-quarters of surveyed companies expect to produce less or the same as in 2025.
The challenging economic climate is also evident in investment plans: 33% of companies will invest less in 2026 than currently, while only 23% will increase their spending.
Investment expectations recorded in the Institute’s (IW) surveys have marked more than five consecutive negative semesters.
“Companies are affected by high geopolitical stress,” stated IW’s economic specialist Michael Grömling.
This is compounded by domestic expense distribution issues, such as high energy prices, social security costs, and bureaucracy, according to the institute’s evaluation.
“Without state reforms, it becomes increasingly unlikely that the government’s multi-billion euro (investment) programs will have the expected and necessary effect,” he concluded.
