Germany’s leading stock exchange companies are feeling the effects of the weak economy. In the first nine months of 2024, the revenue of the 100 stock exchange groups with the highest sales shrank by 4 percent, as a study by the auditing and consulting firm EY showed. It was the second decline in a row. The operating profit (EBIT) even fell by an average of 19 percent. The automotive industry, among other things, weakened, but remained at the top in terms of sales and profits.
At the same time, employment in companies fell in the first nine months. In total, more than 30,000 jobs were lost – a decrease of 0.7 percent to a total of around 4.25 million employees worldwide. This is the first decline since 2021. After the corona pandemic, many companies created jobs, explained EY. “Now we are seeing a turnaround.”
“The year 2024 was a difficult year for top German companies,” said Jan Brorhilker, Managing Partner at EY, with a view to the weak German economy and a lack of stimulus from, for example, Asia. “What is particularly problematic is that if growth was achieved at all in the past two years, the rate was often below the inflation rate. In fact, many companies are shrinking.”
According to EY, 66 of the 100 top-selling companies in Germany were able to increase their sales in 2023; this year only 48 companies were able to do so. Sales fell the most this year at energy suppliers (minus 26 percent) as electricity and gas prices fell. There were also declines in the ailing chemical and automotive industries with minus 5 and minus 2 percent respectively. However, sales grew in the transport sector (plus 3 percent), as did the IT sector (plus 2 percent).
Telekom ahead in profits thanks to the USA
Despite all the problems, car manufacturers have the highest sales, as an EY ranking shows: Up Volkswagen (237.2 billion euros in sales in the first three quarters) follow Mercedes Benz (107.1 billion) and BMW (105.9 billion). Thanks to its US participation, the company achieved the most operating profit Deutsche Telekom with 17.8 billion euros within nine months. This is followed by VW (12.9 billion) and Mercedes-Benz (10.4 billion).
The general conditions are likely to remain difficult in the new year, says Brorhilker. The downward trend in employment is likely to intensify. “Unemployment will become an issue again, but the shortage of skilled workers will still remain.”
IW survey: German economy remains pessimistic
Pessimism is also currently dominating among business associations when looking at 2025. “The current economic situation has rarely been so worrying. We have known a number of crises over the past 100 years, but none were as complex with as many causes as the one we are in now,” says Michael Hüther (62), director of the employer-related Institute of the German Economy (IW), summing up the results annual survey of his company among large industry associations.
At the turn of the year 2024/2025, 31 of the 49 associations surveyed rated the current situation in their industry as even worse than a year ago. Just four economic sectors reported an improvement within a year: waste disposal, insurance, trade fairs and real estate.
“Labor, materials and energy are expensive here, excessive bureaucracy is paralyzing, the uncertain situation on the world market is weakening exports, and the political chaos at home is weakening investments,” complained Hüther. “The next federal government faces the major task of creating a sustainable economic perspective.”
The pharmaceutical industry and aviation want to create jobs
Looking ahead to the new year, there are more optimists and fewer pessimists compared to the previous survey. However, the pessimists still predominate. 20 of the 49 business associations expect a decline in production in their area in 2025, 13 assume the values will remain the same, and 16 expect more production.
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According to the IW researchers, the overall rather poor mood will have an impact on the labor market: 25 associations expect job cuts in their industries in the coming year, only seven industry associations expect more employees. These include the pharmaceutical industry and aircraft and spacecraft construction. In addition, service providers such as shipping companies. There are likely to be fewer jobs, for example, in the iron and steel industry, in mechanical engineering, in the automotive industry or in construction.