German Business Associations Predict Job Cuts Amid Ongoing Economic Crisis

A survey by the German Economic Institute reveals that many German business associations foresee job cuts in 2026 amidst ongoing economic struggles. The automotive, paper, and textile industries anticipate declines due to increased protectionism and weak exports. However, sectors like aerospace are benefiting from higher defense spending.

A recent survey conducted by the German Economic Institute IW indicates that a significant number of German business associations are bracing for job cuts in 2026 as the nation's economic challenges persist. The survey highlights the impact of global protectionism and weak exports, particularly affecting industries like automotive, paper, and textiles.

Out of 46 associations surveyed, 22 predict workforce reductions, while only nine expect to expand hiring, and 15 foresee stable job numbers. The economic conditions have led to diminished price competitiveness, with increased protectionism and high domestic costs taking a toll. IW's director, Michael Huether, remarked that those anticipating a rapid economic recovery will be disappointed.

Despite these challenges, some sectors are showing resilience. Increased defense spending has positively impacted aerospace and shipbuilding industries, while the services sector reports better conditions than last year. Business sentiment reflects slight optimism, as 19 associations foresee higher production in 2026 compared to 2025, marking a shift from years of negative outlooks.

(With inputs from agencies.)