The German-British Business Outlook

The German-British business community continues to be successful, but the overall sentiment is not as positive as it was six months ago. Unsurprisingly, participants believe the UK Government should continue to prioritise resetting its relationship with the EU, estimating that this could improve their trading conditions. 

Currently, 46% of respondents view their own operations as performing positively or very positively, 38% as stable, and 15% as negatively. This predominantly positive outlook is likely due to the strong competitive position that companies in the German-British business community have built over the past five years. Nearly 40% were able to improve their position in the market vis-à-vis their competitors, with  only 16% experiencing  a decline in this respect. Being a “German” brand or German owned seems to be a competitive advantage in the British market. 

In contrast to the positive outlook for their own operations, the sentiments for the overall development of the UK economy have deteriorated. Now, only 21% of firms (compared to 34% in spring 2024) still expect the UK economy to perform better over the coming year and 33% are expecting a sluggish performance (19% in spring). As a result, only 32% (44% in spring) aim to expand their activities. However, demand for labour continues to be strong with 40% of companies expecting to hire new staff over the coming year.

As with our past findings, political uncertainty, lack of demand, shortage of skills, and administrative hurdles as a result of Brexit continue to be major challenges for doing business in the UK. Therefore, it is not surprising that 80% of the German-British business community believe that the UK Government’s biggest economic priority should be to continue to improve the relationship with the EU. Interestingly, just 20% of participants consider controlling the public deficit a key priority. 

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