German economy’s assessment of both its current situation and the outlook for 2022 as a whole is more negative than before the turn of the year. Although the export business is booming and employment figures are also developing positively, overall, there is a great deal of uncertainty among companies on how the economy will develop. This is the result of the nationwide IHK business survey conducted at the beginning of the year, with almost 28,000 companies from all sectors and regions participating.

“The economy is holding its breath,” said Martin Wansleben, chief executive at the association of German chambers of commerce and industry DIHK (Berlin, Germany; www.dihk.de), summarising the results. After the increases of the past year, the survey currently shows a sideways movement or even a slight downward turn for many assessed factors.

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Only just under a quarter of the companies expect business to be better over the next twelve months. This is a drop by half, compared to the previous year. Due to the significantly dampened feedback from companies, the DIHK is lowering its growth forecast for 2022 from 3.6% to 3%.

“Our economic performance is not expected to reach its pre-crisis level until the middle of the year,” Wansleben said. According to the DIHK survey, the greatest stress factors for companies include not only the shortage of materials due to the omnipresent supply bottlenecks, but also the sharp rise in prices for energy and raw material, and the shortage of skilled workers.

In addition to this, many companies fear rising costs due to higher spending on climate protection. Many companies, Wansleben warned, feared a deterioration of their competitive position in global markets. Almost two-thirds of respondents currently rank energy and commodity prices as one of their biggest business risks, and in the industrial sector that figure is as high as 85%.

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“This is the highest value we have ever recorded,” Wansleben emphasised. Across all sectors, nine out of ten companies also report higher purchasing prices as a result of supply bottlenecks. Only 10% of the companies, and thus significantly fewer than in the autumn of 2021, expect the supply problems to end by the middle of the year. The remaining 90% are expecting a longer lean period or do not dare to make a forecast.