The companies in German stock index (DAX) earned more in the second quarter, from April to June, than ever before, according to a new analysis. Operating profit at the 40 corporations rose 16 percent year-on-year to a record €52.6 billion, the consultancy EY announced on Friday. That growth, however, is being carried by only a handful of sectors. Over the same twelve months, the DAX groups also cut 41,000 jobs.
According to EY, the DAX companies' operating profit came in ten percent above the previous peak set in the second quarter of 2024. Total revenue likewise hit a new best mark of around €463 billion, an increase of 4.6 percent.
EY stressed that the rise in both revenue and profit is being driven largely by a small number of sectors currently benefiting from exceptional, one-off booms — from the defence industry, to the winners of the worldwide AI and data centre boom, to chemical companies that have been able to raise prices because of tensions in the Middle East and the resulting supply bottlenecks in Asia.
Among many traditional industrial groups, by contrast, there is no sign of a turnaround. The carmakers in the DAX, for example, recorded a 1.2 percent fall in revenue and a 12 percent slump in profit in the second quarter, according to EY's calculations. Employment at Germany's largest listed companies continues to decline, EY found. As of 30 June, the companies employed around 3.49 million people, 1.2 percent, or 41,000 fewer, than a year earlier.
Jan Brorhilker of EY commented: "The current jumps in profit are in many cases owed to external special factors, not to newly won competitive strength." They could disappear just as quickly as they arrived, he said. "Because oversized administrative apparatuses, a high vulnerability to geopolitical crises and to a new wave of tariffs and protectionism, as well as excessive costs at the German business location, these fundamental problems persist unchanged." Even if the economy were to pick up again, he added, the pressure would therefore remain high.
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