Economy in the southwest: easy hope of stabilization!

Economy in the southwest: easy hope of stabilization!

The economic situation in southwestern Germany shows the first signs of stabilization. This emerges from a recent survey by the Baden-Württemberg Chamber of Commerce and Industry (BWIHK), which was carried out between April 22 and May 13, 2025. According to the survey, 18 percent of the respondents expect 3,676 companies better business in the next twelve months, which corresponds to an increase in two percentage points compared to the beginning of the year. At the same time, the proportion of pessimistic companies has dropped from 29 to 24 percent, which brightens the general mood a little, although the majority of the companies still remain skeptical.

The current business situation is rated as good by 26 percent of companies, with this value has dropped by two percentage points. 22 percent appreciate their situation as bad. BWIHK President Jan Stefan Roell emphasizes that despite the slight improvements, there is no noticeable spirit of optimism in the economy. In particular, the willingness to invest remains low: only 22 percent of companies plan to increase their expenses in the next twelve months. Around a third of the respondents want to reduce their investments and give way back above all before the uncertain market situation.

challenges for companies

According to the BWIHK survey, weak domestic demand, rising labor costs and geopolitical tensions are among the greatest business risks. The industries in construction, trade and hospitality in particular in particular feel the pressure, while finance and consulting service providers have so far been perceived as a bright spot. This situation is in accordance with the general economic trends: Deloitte reports about a gradual recovery in private investment activity, which is not strongly pronounced.

The financing costs could decrease through monetary loosening, which would support the ECB's bank demand in Germany in accordance with the Bank Lending Survey. The loan demand index rose from -12.9 in the first quarter of 2024 to +16.1 in the second quarter, but has decreased slightly to +13.3 in the third quarter. This indicates that companies are increasingly asking loans, but the willingness to invest remains steamed overall. The industries differ considerably. While the processing trade has declines in the investment plans, service companies tend to show increasing investment intentions.

political framework and outlook

In the context of current economic uncertainties, the upcoming federal government is planning measures to boost the German economy. These include the reduction in energy prices and improved depreciation options. Such reforms could potentially strengthen the competitiveness of German companies. In the long run, reforms on the capital market are not the focus, but could still have positive effects on the financing of young, innovative companies, in particular by strengthening the risk capital markets.

The structural challenges that have burdened the German economy in the past must be addressed urgently. According to Deloitte, a higher increase in investments will be necessary to compensate for the decline in recent years and to counter the challenges such as demographic change and the innovation gap. Geopolitical uncertainties remain a significant factor in influence that significantly impairs traditional growth drivers, especially in the export area.

For more information: Südkurier href = "https://www.deloitte.com/de/our-thinking/economic-thinking/blogs/2025/ichticht-kündertungs-2025.html"> deloitte , db Research .