Ifo survey
German companies' existential fears on the rise again
According to an Ifo survey, almost one in fourteen companies now believes its existence is under threat. This is significantly more than recently - but the figures have been much higher.
Almost one in fourteen companies currently sees its existence threatened. In a survey conducted by the Munich Ifo Institute in October, 7.3% of the companies surveyed expressed this view. This is 0.5 percentage points more than a year earlier and 2.5 percentage points more than at the start of 2023. However, the figures have already been significantly higher in previous crisis years - from 13.7% at the start of 2022 to 21.8% in the hot phase of the coronavirus crisis in mid-2020, according to previous Ifo publications.
However, Klaus Wohlrabe, head of the Ifo surveys, takes a negative view of the current increase. "The continuous rise in corporate insolvencies is likely to continue," he says. "In addition to a lack of orders, the increasing international competitive pressure is causing so much trouble for many companies that they see their future acutely jeopardized." The number of corporate insolvencies is already well above the level of previous years.
According to the survey, the current rise in existential worries is partly due to the manufacturing industry. Here, 8.6% of companies report profound economic problems, which is 2.2 points more than in October 2023. Concerns have also increased significantly in the retail sector: Here, 13.8 percent of companies feel that their economic existence is under threat, 3.5 points more than a year ago. In the construction industry, on the other hand, the proportion fell from 8.9% to 7.9% despite the crisis in residential construction. There was also some easing in the service sector. After 6.8 percent in the previous year, 5.8 percent of companies now see massive economic problems. This shows a difference to the high figures of the past: in 2020 and 2021, as well as at the beginning of 2022, service providers and the retail sector in particular drove the figures up.
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