GBP Monitor July: Companies’ Satisfaction with the Government’s Economic Policy Hits Annual Low

Due to the energy crisis and planning uncertainty, German companies are currently particularly dissatisfied with the government’s economic policy. This is documented in the July report of the German Business Panel (GBP) at the University of Mannheim.

The July 2022 data show that the situation of companies in Germany is deteriorating again. On average, their profits have declined by 6.7 percent. More and more company directors are of the opinion that the declining profits can be attributed to the government’s economic policy. The traffic light coalition (Ampelkoalition) receives the lowest score since coming into office: On average, the work of the coalition receives a score of only 3.9 points on a scale from zero to ten.

The construction industry is particularly sceptical about the current economic policy: From the companies in this sector, the work of the coalition receives a score of only 3.4. The reason: Construction businesses are heavily affected by disrupted supply chains, since they depend on a continuous supply of materials. The supply of materials is currently disrupted and, in the eyes of the company leaders, this is caused by the government’s failed investment policy. “Supply chains are seen as part of the infrastructure. Germany has failed to sufficiently invest in its infrastructure, in particular, when it comes to transport, which amplifies supply-chain problems. The companies are right in attributing this to Germany’s economic policy, however, the current government is not responsible for this”, says Professor Dr. Jannis Bischof, holder of the chair of Business Administration and Accounting at the University of Mannheim.

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