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flag German firms expect job cuts in 2026 due to weak exports, high costs, and protectionism, despite modest production gains.

flag German business groups expect job cuts in 2026 as the economy remains stagnant, with 22 of 46 associations surveyed anticipating workforce reductions, driven by weak exports, high costs, and global protectionism, especially in automotive, paper, and textile industries. flag While aerospace, shipbuilding, and services show signs of improvement due to defense spending and better conditions, investment plans remain largely flat or declining. flag A modest rise in positive production outlooks marks the first improvement in years, but overall economic recovery remains elusive. flag Top firms saw profits fall 15% in the first nine months of 2025, with automakers and chemicals hit hardest, though tech and healthcare saw gains. flag Employment dropped by 17,500, partly due to AI adoption, as companies face ongoing challenges from trade policies, competition, and geopolitical tensions.

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