German companies are optimistic for 2021

Most companies look to the current year 2021 with confidence. The majority want to produce more, hire more and invest more.

Despite supply bottlenecks in industry, optimism is spreading throughout the German economy. For the first time since the beginning of the pandemic, most companies are looking “really confident” about the current year, according to the employer-related institute IW.

As emerged from an economic survey conducted by the institute on Monday in advance of the Reuters news agency, the majority of the approximately 2.000 companies surveyed want to produce more, hire more employees and invest more. "The pandemic is currently losing its horror," said IW economic chief Michael Grömling. However, it will take years before the slump is evened out again.

According to the study, 51 percent of companies now expect higher production in 2021. Around 42 percent also want to invest more. Around 43 percent of the companies are also planning to employ more employees than in the crisis year 2020. "Compared to the survey in spring, the mood has brightened significantly, the optimists now dominate all categories," explained the institute.

Industry is recovering, construction is concerned

At the beginning of the pandemic, the industry had to cope with particularly sharp declines in production. 59 percent of the companies in this sector are now optimistic - even though important components such as chips are still not available.

In the service sector, around every second company looks to the future with confidence; only 13 percent of companies expect a deterioration in 2021 compared to the previous year. The construction industry is more cautious: Only 37 percent of the companies are optimistic for the year as a whole, 25 percent expect a worse business situation than in 2020.

In the industry, many building materials are scarce or not available at all, which affects the mood. In addition, the division came through the crisis much better than others: “A significant improvement is therefore not to be expected,” according to the IW.