One in four German companies expect business to deteriorate in 2026, Ifo says

The poll showed that 59% of the companies do not expect their economic situation to change in the coming year, while 14.9% hope to see an improvement.

"Companies remain very cautious. There is no spirit of optimism to be seen anywhere," said Klaus Wohlrabe, head of surveys at Ifo. "Hardly any sector is really optimistic about 2026."

In the service sector, 62.8% of respondents expect their situation to remain stable, 23.2% forecast an unfavourable development and 14% hope for an improvement.

A particularly large number of pessimistic assessments came from the trade sector, with 32.5% of the companies expecting a deterioration, Ifo said.

The outlook in the construction industry is also subdued, with 33.2% of companies expecting a less favourable situation, 56.5% no change and 10.3% hoping for better business.

"The figures are surprising given that the sector could actually hope for the announced infrastructure package," said Wohlrabe. "It doesn't yet seem to be causing any euphoria."