FILE - The buildings of the banking district are pictured in Frankfurt, Germany, on Feb. 19, 2024. Germany businesses remain mired in pessimism despite a small uptick in the latest survey, as Europe’s largest economy struggles with shortages of skilled labor, slower global trade, and political squabbling. (AP Photo/Michael Probst)
FRANKFURT, Germany (AP) — Germany’s businesses remain mired in pessimism, a key survey showed Friday, as Europe’s largest economy struggles with shortages of skilled labor, slower global trade, high interest rates and political squabbling.
The closely watched Ifo institute survey of business sentiment rose only slightly to 85.5 points in February from 85.2 points in January due to “slightly less pessimistic expectations,” the institute said in an accompanying statement.
“The German economy is stabilizing at a low level,” the institute said.
The survey results follow a sharp downgrade of the government’s expectations for growth this year, to only 0.2%, from 1.3% in the previous forecast. Germany’s economy shrank 0.3% in 2023, the worst performance by a major economy and a reversal of years of economic success as an export champion.
Giant chemical company BASF on Friday joined a string of major employers saying they would cut positions, citing a “low-demand environment.” The company said it made money last year “in all significant countries except Germany” and losses at its home base in Ludwigshafen meant it would seek to cut cut costs there by 1.1 billion euros ($1.2 billion) a year by the end of 2026.
The efficiency program “will therefore also unfortunately lead to further job cuts,” CEO Martin Brudermueller said in a statement with specifying how many positions would go.
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