Southern Brandenburg's Economy Under Pressure: Companies Expect the Next Deterioration

The mood in southern Brandenburg's economy has noticeably worsened. In the current economic analysis by the Cottbus Chamber of Industry and Commerce (IHK), several key indicators are simultaneously weaker: business situation, expectations, investment inclination, and financial situation. For many companies, this does not result in a single crisis signal, but rather a bundle of risks that increasingly slows down decisions.

Business Situation Tips – Expectations Slide to Crisis Level

According to the IHK, the business situation balance has fallen from 23 to 4 percentage points compared to early summer 2025. The outlook is even more pronounced: the expectations balance dropped from minus 24 to minus 30 percentage points. The chamber classifies this level as comparable to the phase at the beginning of the Ukraine war in 2022.

The skepticism is clear in the companies' responses: 40 percent expect a further deterioration in their business situation. Only 10 percent expect an improvement, half anticipate no change. IHK Chief Executive André Fritsche summarizes the situation as follows: "Across all sectors, the mood is bad."

Multiple Strains at Once: Costs, Demand, Uncertainty

The IHK names high energy and raw material prices, rising labor costs, weak demand, and consumer restraint as the most important braking factors. Added to this are domestic and foreign policy uncertainties, which make planning even more difficult—especially for investments and personnel.

• Energy and raw material prices: 74 percent
• Economic policy framework conditions: 64 percent
• Labor costs: 60 percent
• Domestic sales: 49 percent
• Skilled labor shortage: 42 percent
• Financing: 17 percent
• Foreign sales: 10 percent
• Impacts of climate change: 5 percent

The pattern behind this is crucial for the region: When costs remain high, demand fluctuates, and political conditions are considered uncertain, cautious planning quickly turns into waiting—even if orders do not completely collapse.

Investments Are Being Postponed – With Consequences for Modernization and Growth

According to the IHK, the weaker mood is now visibly affecting investment plans: More than half of the companies want to postpone or completely suspend investments. This is particularly tricky for southern Brandenburg, because it means not only a short-term lack of orders. Those who postpone modernization, digitization, or capacity expansion lose time—and often also productivity leeway in competition.

At the same time, the picture varies by sector. In industry, 65 percent of companies plan to maintain or increase investments; around every second industrial company is investing in capacity expansion. In retail, however, 69 percent of companies do not want to invest at all. The figures mark a growing gap: While parts of industry still have room for maneuver, consumer-oriented sectors in particular are moving into a defensive stance more quickly.

Financial Situation Tight: Equity Decreases, Liquidity Becomes Scarcer

At the same time, according to the IHK, the financial situation of many companies is deteriorating. 57 percent rate it as problematic. Around a third report declining equity, just under a quarter report growing liquidity shortages. When equity ratios fall and liquidity becomes tighter, loans become more expensive or harder to access—and investment decisions are further slowed down.

Structural Change as Hope – But Many Companies Struggle with the Present

The IHK also points to a contradiction that has characterized the region for some time: On the one hand, there are signs of a new beginning due to structural change, on the other hand, many companies are still under considerable pressure. According to the chamber, small and medium-sized enterprises are particularly affected by difficult conditions. For them, every additional cost increase—whether for energy, materials, or personnel—often means immediate restrictions on investments, inventory, or new hires.

André Fritsche links the situation analysis with a clear political appeal: "Bold reforms that quickly bring noticeable relief have been the order of the day for months—but are taking far too long to materialize. The most important things for all companies are reliability and planning security. It's about jobs, investments, and the economic future of Germany as a business location."

Labor Market Still Holding – But Willingness to Hire Is Decreasing

So far, the labor market appears more robust than expectations and investments. According to the IHK, employment is still stable, but willingness to hire is declining across all sectors. 24 percent of companies plan to cut jobs. Only 13 percent want to create new jobs.

The fact that 42 percent of companies still cite the shortage of skilled workers as a risk also shows: Even in a weaker economy, the labor market remains a structural issue for many companies. Those hiring less today often do so not out of relief, but because uncertainty and cost pressure reduce their room for maneuver.

All in all, the IHK data for southern Brandenburg do not paint a picture of a sudden collapse, but rather of a broad standstill. Particularly critical is that pessimistic expectations, postponed investments, and a tight financial situation are occurring simultaneously—thus weakening exactly those factors that would be crucial for regional recovery and structural change.