25% of German firms 'to slash jobs' in 2013

According to the survey of 2,300 companies by the IW economic institute, 28% of firms questioned said they planned to reduce staff levels in 2013, compared with 20% that expect to take on employees.

The survey also showed that 28% of firms were anticipating making fewer investments next year than this year, with 23% of companies saying they would invest more in 2013.

The report came as signs grow that the three-year eurozone crisis is taking an increasingly heavy toll on Germany, the bloc's economic powerhouse.

Data published last week showed the economy barely grew in the third quarter of the year, rising by only 0.2% compared with the previous three months of the year.

Economists expect Germany to grind to a complete standstill or possibly even to go into reverse in the fourth quarter as the crisis hits demand for its all important exports. Business confidence as measured by the monthly survey published by the Ifo institute in late October showed sentiment at a two-and-a-half year low.

The IW survey painted a barely more optimistic picture, with one third of companies saying they expected orders to be weaker next year, compared with only 24% predicting fuller order books.

"Despite the economic weakness stemming from the declining world economy, the IW does not expect Germany to fall into recession," the institute wrote.

"Our economic researchers predict economic growth of 0.75% in 2013. A precondition for this, however, is that the debt crisis in Europe does not escalate," the institute added.

Source: AFP via I-Net Bridge