Nearly 40% of German firms expect decline in business activity: Survey

By Gokhan Ergocun

ISTANBUL (AA) - Due to high energy costs and ongoing supply chain problems, 39% of German companies expect a decline in their business activities in 2023, a survey revealed on Monday.

According to the survey conducted by the German Economic Institute (IW) with 2,500 firms, the construction industry in particular is preparing for a recession.

It said Germany's companies were still optimistic at the beginning of the last year but high energy prices and raw material problems ruined their good mood.

The survey's results showed that 26% of the firms expect a better financial year in 2023, while 35% of them expect stagnation.

A serious recession is looming, especially in the construction industry, as more than half of the construction companies expect a decrease in their sales in the new year.

Michael Gromling, an economic researcher at the institute, said ongoing uncertain energy supply issues affect all parts of the country equally and it is not good news for 2023.

Germany is facing a new recession, he warned.