Due to rising energy prices, raw material shortages, and a lack of skilled workers, Germany's Chambers of Industry and Commerce (DIHK) reduced its 2022 growth prediction for Europe's largest economy to 3.0% on Friday, down from 3.6% in October.
The survey of nearly 28,000 businesses across all sectors found that rising energy and raw material prices were viewed as a business risk by 64% of firms, the highest ever recorded in a DIHK survey, up from 58% in the organization's last poll.
According to the data, the balance of firms' positive and negative expectations fell to five points from ten, compared to the long-term average of seven points.
According to DIHK, only about 10% of companies expect supply constraints to be resolved by mid-2022, and 22% do not expect the situation to ease until 2023.
"We will probably not reach pre-crisis levels of economic output until the middle of the year," DIHK Managing Director Martin Wansleben said, adding that anticipated cost rises due to energy transformation may deter some investors.
"Germany currently has the world's highest energy prices as a business location. The tax burden for businesses is also significantly higher than the OECD average" Wansleben said.
According to DIHK, just under a third of companies plan to invest more in 2022, while just under a fifth want to invest less.
"The economy is holding its breath. True, there is still a cautiously optimistic sentiment among businesses. However, there are significant uncertainties, and many are unsure what the future holds" the director added.