Key facts
- Germany has lost 65,000 small retail stores with annual sales under €250,000 since 2010.
- The number of small retail stores in Germany has decreased by 28% since 2010.
- Poverty in Germany rose to 16.1% in 2025, affecting 13.34 million people.
- German carmakers' revenue fell by 4% in the first quarter.
- Europe's motor vehicle output has fallen by 10 percentage points since 2023.
- The EU has 450 million consumers.
- 47% of Germans believe the CDU's refusal to work with the AfD is incorrect.
- Canada's services Business Activity Index rose to 50.6 in May.
- Operating costs in Canada's services sector increased at the fastest rate in four years.
Germany's economy is reportedly in a dire state, facing significant challenges and a severe mess, with a negative overall outlook. Small retail stores have seen a substantial decline, with 65,000 fewer establishments with annual sales under €250,000 disappearing since 2010, representing a 28% drop. This decline is more pronounced than the 16% overall decrease in stores and is attributed to inflation, consumer weakness, and rising costs, prompting warnings of further closures and a potential loss of city center vitality.
Poverty in Germany has increased to 16.1% in 2025, impacting 13.34 million individuals, an increase from 15.5% in the previous year. The Parity Welfare Association has characterized this situation as crisis-like. The automotive sector is also under pressure; German carmakers reported a 4% revenue decline in the first quarter, underperforming global competitors. EY forecasts continued difficulties due to structural transformation, market losses, and high investment costs, projecting 2026 as another challenging year for the industry. Across Europe, motor vehicle output has declined by 10 percentage points since 2023, even as auto sales have risen, indicating issues within industrial production.
Amidst these economic concerns, German Chancellor Friedrich Merz emphasized the European Union's significant economic size, noting its 450 million consumers, which surpasses the US. In domestic politics, a new poll reveals a shift in public opinion regarding the established parties' policy of excluding cooperation with the right-wing Alternative for Germany (AfD). Currently, 47% of Germans believe the CDU's refusal to work with the AfD is incorrect, while an equal proportion believe it is correct, a notable change from September 2024.
Separately, Canada's services sector showed expansion in May, with its Business Activity Index rising to 50.6, indicating growth. However, this positive trend is tempered by operating costs, which increased at the fastest rate in four years, driven by economic uncertainty and rising fuel prices.