Saxon Economy Remains Weak: IHK Survey Reveals Continued Low Sentiment for Autumn 2025

Economic Sentiment in Saxony Hits New Low

The economic mood in Saxony, Germany, continues to be profoundly subdued, according to the latest IHK Business Survey for Autumn 2025. The survey, conducted in September 2025 and published on October 17 and 18, 2025, reveals that the region's economy is not expected to see a recovery in the coming months. The IHK Business Climate Index has dropped to 97 points, marking a further decline from the previous survey and remaining below its long-term average.

The comprehensive survey gathered responses from approximately 1,800 companies across all economic sectors in Saxony, representing nearly 85,000 employees. The findings underscore a persistent weakness that has characterized the Saxon economy for several years.

Key Factors Contributing to Weakness

Several factors are cited as contributing to the ongoing economic downturn in Saxony. Businesses report experiencing stagnating sales and a significant decline in order intake, both from domestic and international markets. Concurrently, companies are grappling with rising costs, further squeezing their margins. A stark indicator of the challenging environment is that only 30 percent of the surveyed businesses are operating with a capacity utilization exceeding 85 percent.

The IHKs attribute part of Germany's broader economic slump to decades of insufficient state investment, which has hindered the country's ability to act as an economic engine during downturns. Locally, the Saxon government's budget for 2025/2026 and the financial difficulties faced by municipalities are also contributing to the pessimistic sentiment among businesses. An improvement in the external economic environment and overcoming the growth weakness in the industrial sector are deemed crucial for any future economic revival.

Sectoral Performance and Outlook

The survey highlights varying degrees of impact across different sectors:

• Industry: This sector has experienced a particularly noticeable deterioration, with the business situation balance falling by five points into negative territory, now standing at -4 points. Negative assessments outweigh positive ones in most industrial areas, with the exceptions being the chemistry and pharmaceutical industries, which show some positive impulses.
• Construction: The construction sector remains stable, but without any significant positive momentum.

Looking ahead, the outlook for investment and employment remains cautious. More than half of the companies surveyed plan either no expenditures or anticipate decreasing their investments. In terms of staffing, two-thirds of businesses intend to maintain their current workforce levels, while a notable 22 percent expect to reduce their staff.

Comparison with Previous Surveys

The current index of 97 points is lower than the previous survey. For context, the Spring 2025 IHK survey had shown a slight improvement, with the index rising to 100 points, though still below the long-term average of 109 points. The Autumn 2024 survey had registered the index at 96 points, indicating a persistent low level of economic confidence in the region.