32% of German Companies Plan Job Cuts by 2027, Stoking Fears of Slower Recovery
Summary
- 32% of German companies said they expect job cuts by 2027, with concerns rising over lower investment and stagnant production.
- About 40% of the companies surveyed said they plan to reduce investment, while 80% said they expect production to stagnate or decline.
- With Germany's GDP growth rate slowing to 0.2%, IW said the country's brief recovery could end in 2027.
Forecast Trend Report by Period
Roughly one in three German companies plans to cut jobs by 2027, raising concerns that the country's economic recovery could stall next year as more firms scale back investment and brace for stagnant output.
Walter Bloomberg reported on November 10 that a survey by the German Economic Institute, or IW, of more than 1,000 companies found 32% expect to reduce headcount 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. Eighty percent 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 are deteriorating.
IW warned that Germany's brief recovery could end in 2027. The survey showed corporate sentiment has remained weak for the longest stretch since 2005.
JH Kim
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