The German economy is stuck in a recession.

According to the German Chamber of Industry and Commerce (DIHK), companies in Germany are holding back on investments. Only 24 percent of companies are currently planning to increase investments, while one-third intend to reduce investments, according to an internal letter from DIHK Executive Director Helena Melnikov.

Not even one in five companies could imagine expanding their own capacities. Melnikov speaks of sobering figures. She refers to the results of a new economic survey among companies, which the German Chamber of Industry and Commerce (DIHK) presented on Tuesday.

Many business associations see major disadvantages in Germany as a location: high energy costs and taxes, excessive bureaucracy, and lengthy planning and approval procedures. After two consecutive years of recession, gross domestic product is expected to stagnate this year.

US President Donald Trump's uncertain tariff policy is considered a major risk. The new German government has announced numerous measures to stimulate the economy and encourage companies to invest more in Germany again.

For the economy to grow again, investment is needed above all, Melnikov stated in the letter. "Our equipment investments are still ten percent below pre-coronavirus levels. Companies must have the courage and confidence to invest money."

According to the survey, many companies are concerned about domestic and foreign demand. Energy and raw material prices, as well as labor costs, are also seen as significant barriers to investment.