German companies in Slovakia are facing growing cost pressures and heightened uncertainty about the country’s economic direction, according to the latest AHK World Business Outlook published by the German-Slovak Chamber of Commerce (AHK Slowakei).

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The survey of 85 German firms shows that while many remain stable and operationally resilient, confidence in Slovakia’s broader economic environment has weakened sharply.

Business confidence slips amid economic headwinds

According to the report, 45 percent of respondents described their current business situation as “satisfactory”, 33 percent as “good”, and 22 percent as “poor”. However, expectations for the coming year are far more pessimistic: only 15 percent of firms expect their performance to improve, while 27 percent foresee a downturn.

Two-thirds (67 percent) of companies anticipate that the overall Slovak economy will worsen over the next 12 months — a sharp indicator of unease across sectors.

“German business in Slovakia is currently operating with the handbrake on,” said Pavel Lakatos, president of AHK Slowakei. “Many companies continue their projects, but with greater caution. The relatively stable outlook for individual firms, compared to the general economy, shows they are relying primarily on their own efficiency and resilience.”

Investment and hiring plans weaken

Investment intentions among German firms have cooled significantly. Almost half (45 percent) of companies plan to reduce investment in the year ahead, while only 9 percent expect to increase it.

Employment plans reflect similar caution: around 32 percent of companies intend to cut staff numbers, compared to just 16 percent that expect to hire more workers.

“High cost pressures and weak demand in some industrial sectors are slowing down momentum,” said Lakatos. “That’s why reliable and predictable conditions are so important — businesses need stability to plan and innovate.”

Costs and policy uncertainty remain biggest risks

Economic conditions and labour costs remain the top challenges for German firms in Slovakia.

• 72 percent of companies cite Slovakia’s overall economic framework as their main business risk.

• 64 percent identify rising labour costs as a major concern.

• 56 percent point to weak or uncertain demand.

The shortage of skilled labour, a long-standing issue, remains problematic for 44 percent of firms but is now seen as slightly less pressing than in previous years.

More than half (55 percent) of respondents also report negative effects from current US trade policy, underscoring how international tensions are affecting Slovakia’s export-oriented manufacturing base.

“These results show that global developments are clearly being felt in Slovakia,” Lakatos said. “The current US trade stance adds uncertainty for German companies, many of which are reassessing supply chains and relying more on the European single market.”

German investors remain key contributors to Slovak economy

Despite their concerns, German companies continue to play a vital role in Slovakia’s public finances and employment base.

According to the Taxparency 2024 study by consultancy BMB Partners, German firms paid €638 million in corporate income tax last year. When social and health insurance contributions are included, their total payments reached €1.65 billion — representing 23 percent of all taxes and levies paid by Slovakia’s 300 largest firms.

“German investors remain a stabilising force in Slovakia,” said Eva Kusá, partner at BMB Partners. “Almost all German firms among the top 50 taxpayers are rated as ‘highly reliable’ by the tax authorities.”

Major German employers include Volkswagen Slovakia, Continental, ZF, Schaeffler, Vaillant, Lidl and Kaufland. Volkswagen Slovakia alone generated turnover of €12.5 billion in 2024, making it the country’s largest company.

Outlook: stability valued over expansion

The AHK survey, conducted in September and October 2025, covered German-owned firms across industry (45 percent), trade (14 percent) and services (41 percent).

While German businesses remain among Slovakia’s most important investors and taxpayers, the chamber’s findings underline a cautious mood across sectors.

“Our members are committed to Slovakia,” Lakatos concluded, “but to keep investing in the country’s future, they need predictability and cost stability. Without that, expansion plans will remain on hold.”