From strength to weakness — Germany's transport network is turning into a major economic threat
German companies are sounding the alarm over the deterioration of transport infrastructure, warning that poor road and rail conditions are harming their ability to operate efficiently. A new survey conducted by the Cologne Institute for Economic Research (Köln Institut der deutschen Wirtschaft - IW) found that 84% of around 1,100 companies attributed their poor business performance to infrastructure problems. A decade ago, the figure was only 60%, highlighting the worsening situation.
The report indicates that what was once a competitive advantage for Germany — its reliable infrastructure — has now become a burden. Compared to a similar study in 2022, the percentage of affected companies has risen by about five percentage points. At that time, post-COVID disruptions and the impacts of the Russian war in Ukraine had already strained logistics networks and raised energy prices. The institute stated, "The deterioration of the situation again is a serious warning sign for Germany's status as a business location."
Road and railway networks topped the list of problems. About 92% of directly affected companies and 77% of all companies reported that poor road conditions harm their business. The situation of the railways was not better — 71% of the affected and 60% of all companies considered it a major weakness. Many companies indicated that ongoing maintenance, frequent diversions, and increasing breakdowns made train transport unreliable. The institute suggests that ongoing renovation work is necessary, but at the same time, it has caused widespread disruptions that have burdened companies even more.
Small businesses are particularly affected, as many have reported that poor logistical efficiency and ongoing delays are shrinking their profits. The institute believes that the Infrastructure and Climate Neutrality Fund, approved in March with a value of 500 billion euros, could help reverse the negative trend — but only if investments are actually directed to new projects. Critics fear that the government will reallocate existing funds instead of providing additional financing. Reports have indicated that the Ministry of Transport has transferred about 10 billion euros from its regular budget to the special fund, raising doubts about the credibility of government promises.
According to the plan, around 19 billion euros from the special fund for the railway sector is set to be allocated in 2026, while at the same time about 14 billion euros will be cut from the core budget. Expert Thomas Pohl from the institute warned: "The transport infrastructure has become an obstacle to the German economy. The money must reach the right place, otherwise we will miss the opportunity." While the government aims to balance transport development with its climate goals — to achieve carbon neutrality by 2045 — companies say the urgent need is clear: repairing roads, modernizing railways, and restoring confidence in the backbone of the German economy.