According to the German Economic Institute (IW), four out of ten German companies expect business to shrink in 2023. The survey was conducted Monday (9 January). This poll was caused by high energy costs, supply chain issues, and the ongoing conflict in Ukraine.
The likelihood of experiencing a shortage in gas during winter 2022/23 is less than it was during summer 2022. Since then, energy prices have fallen. They are still high, and production disruptions are not ruled out,” IW reported in a survey.
“It will also become evident in the course of 2023 how much gas and electricity supply we can build up for next winter and what severe disruptions could happen in 2023.”
Surveys of more than 2,500 companies found that nearly a third expected output to stagnate while the rest predicted business growth.
According to the International Monetary Fund, Germany’s largest economy will shrink by 0.3% in the next few years. This is due to Russia’s sudden halt in gas flow, which was once its main supplier.
The outlook for Germany’s construction industry is particularly grim. IW surveyed more than half the respondents and found that only 15% of them expect a decrease in production.
The industry is faring no better. 39% of companies surveyed expect a decrease driven by a cautious assessment about the consumer and basic sector.
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