German companies have been feeling the impact of the Iran war, especially in their Middle East operations, a survey has shown.
The downturn is most pronounced among firms active in the Gulf region, including Saudi Arabia, Kuwait, Israel, Qatar and the United Arab Emirates, where assessments of current business conditions have sharply deteriorated. Sentiment has also worsened in countries such as India and Sri Lanka due to their dependence on energy imports from the region, the Association of German Chambers of Industry and Commerce (DIHK) said.
The DIHK’s head of foreign trade, Volker Treier, said hopes for an economic recovery had been dashed, adding the global economy is in “crisis mode” and companies are experiencing this directly. “This is more than just a slowdown in the economy. Uncertainty is becoming the determining factor,” Trier said.
The DIHK survey, based on responses from more than 4,500 internationally active companies, found only 21% expect economic conditions to improve at their foreign locations over the next 12 months, while 32% anticipate a decline.
High energy costs are now seen as the biggest risk by 46% of firms, more than double the level in autumn 2025. Supply chain disruptions (40%) and rising raw material prices (37%) are also major concerns.
