32% of German Firms Plan Job Cuts by 2027 as Recovery Concerns Mount
Summary
- Thirty-two percent of German companies said they expect workforce reductions by 2027, with concern rising over lower investment and stagnant production.
- About 40% of the companies surveyed said they plan to reduce investment, while 80% expect stagnant or declining production.
- IW said Germany’s short-lived economic recovery could end in 2027, and that weak economic outlook readings are stretching into their longest period since 2005.
Forecast Trend Report by Period
About one in three German companies plans to cut jobs by 2027, raising concern that the country’s economic recovery could stall next year as businesses scale back investment and brace for stagnant production.
Walter Bloomberg reported on November 10 that a survey by the German Economic Institute, or IW, of more than 1,000 companies found 32% of respondents expect workforce reductions by 2027. That was up 3 percentage points from 29% in a survey conducted this spring. By contrast, only about one in six companies plans to hire.
About 40% of the companies surveyed said they plan to reduce investment. Roughly 80% expect production to stagnate or decline.
Germany’s third-quarter gross domestic product growth slowed to 0.2%. Among industrial companies, 47% said business conditions were worsening.
IW said Germany’s brief economic recovery could end in 2027. Companies’ economic outlook has remained in its longest slump since 2005.
