The economic spring is failing - economic conditions as the biggest obstacle to growth

The results of the representative survey of almost 3,000 member companies conducted by the Berlin and Brandenburg chambers of industry and commerce in January give little cause for confidence in a rapid economic recovery. At 101 points, the economic climate index* is only one point above the stagnation threshold and remains on the brink of a downturn. The capital region is thus experiencing the longest phase of economic weakness in twenty years. The risk assessments of the companies surveyed show that the economic crisis is now being overshadowed by a structural crisis. Two out of three companies cite the economic policy framework as an obstacle to growth. The shortage of skilled workers, which topped the risk list in previous years, is currently only in third place.

In both federal states, the nationwide weakness in industry is now also making itself felt. Compared to fall 2024, the values for Brandenburg rose slightly, but only from zero to two points, while in Berlin they fell from 29 to 15 points. The current situation in the construction industry also remains tense, with the index at a weak 18 points (in Berlin (fall 2024: 41 points) and 7 points in Brandenburg (fall 2024: 17 points). The retail and hospitality sectors in both federal states are suffering above all from consumers' reluctance to spend. In contrast, the service sector is once again proving to be an economic anchor in the region.

The companies do not have much hope that the situation will improve. The expectations indicator has now been in negative territory for nine surveys in a row. When asked about the biggest business risks, more than 60 percent of Berlin-based companies cite the economic policy framework as their top concern, while in Brandenburg the figure is as high as 71 percent. With more than 50 percent each, labor costs, shortage of skilled workers, domestic sales and energy and raw material prices are among the other top risks.

Manja Schreiner, Managing Director of IHK Berlin: "The results of the current economic survey speak for themselves: the situation is bleak and so are the prospects. However, the results also show ways out of the crisis, as restrictive economic policy conditions are not a given. For example, regulations and reporting obligations, slow approval procedures and too few digitalized processes in administrative bodies are exacerbating the current economic situation. Added to this are the high energy costs and an infrastructure in need of overhaul. With a view to the upcoming federal elections and the next federal government, the main demand of Berlin's business community is therefore not just to simply remove bureaucratic hurdles, but to tear them down with vigor."

André Fritsche, Managing Director of IHK Cottbus: "There is no revival of the economy in sight. The business situation is stagnating and expectations are clearly pointing downwards. In Brandenburg, 34 percent of companies expect business to deteriorate, in Berlin the figure is 22 percent. The new federal government needs to take a major step to quickly resolve structural problems and create better framework conditions for the economy. After all, the current conditions are hampering the ability of two out of three companies to grow. Innovation and investment are urgently needed to maintain and strengthen economic power."

Monique Zweig, Managing Director of IHK Ostbrandenburg: "Business needs mobility - but there is a huge bottleneck here. 59 percent of companies in Berlin and Brandenburg are calling for more investment in local public transport, 54 percent in rail passenger transport and over 40 percent in federal highways and freeways. One thing is clear: a modern infrastructure is decisive for competitiveness. Reliable transport routes secure skilled workers, stabilize supply chains and strengthen the location. Now is the time to remove the brakes on investment and prevent bottlenecks in a targeted manner."

Torsten Stehr, Managing Director Economy IHK Potsdam: "The willingness of the commercial sector to invest remains too weak to stimulate the economy. High prices, increased interest rates and poor economic policy conditions mean that almost 40% of companies in the region as a whole are not investing at all - before the coronavirus pandemic, it was only a quarter. This is understandable, because without reliable framework conditions, companies do not use capital to expand locations, drive innovation or create jobs and apprenticeships. This not only slows down innovation, but also weakens competitiveness. This is why the new government needs to quickly develop and implement a growth strategy - with significantly less bureaucracy, lower taxes and targeted investment incentives."