Dilapidated infrastructure slows down the economy more than ever

A new study by the German Economic Institute (IW) shows that 84 percent of German companies see the poor transport infrastructure as an economic burden. Funds from the special fund could help—if they are actually invested in roads and railways.

The dilapidated transport infrastructure is currently placing a greater burden on companies in Germany than ever before. 84 percent of companies feel that their business activities are regularly impacted by the inadequate transport infrastructure – a new record. In 2018, this figure was 67 percent, compared to just 59 percent in 2013. More than one in four companies currently feels severely burdened, according to an IW business survey.

Road traffic is the biggest problem: 92 percent of companies that feel restricted by infrastructure deficiencies cite road deficiencies as one of the causes. In 2013, this figure was 64 percent. Rail transport is also a growing concern: 71 percent of affected companies consider it a location problem. More than half of them even report significant restrictions. This figure has increased eightfold since 2013. Nearly 34 percent of companies are affected by problems in air and shipping.

"In principle, the federal government's special fund is a suitable means of improving transport infrastructure," says IW expert Thomas Puls. However, these billions should not be used to plug holes in social security funds. For example, in 2026, approximately €19 billion from the special fund is to flow into rail transport, but at the same time, almost €14 billion will be cut from the core budget. "Transport infrastructure has become a brake on the German economy. The money must reach where it's needed. Otherwise, we'll miss the boat," warns Puls.

Methodology: The data basis is the IW Future Panel, conducted in spring 2025. This is an online company survey on topics related to structural change in the German economy, conducted since 2006. Approximately 1,100 companies participated in this year's survey. The figures for 2013 and 2018 are based on the IW Economic Survey.