German companies have cut their investment and hiring plans as they see no sign of a self-sustaining pickup in Europe’s biggest economy, a survey by the DIHK business lobby showed.

Just over half of the 24,000 firms questioned see the country’s economic policy as a business risk, with concerns also growing in industry, according to the group, whose full name stands for the Association of German Chambers of Industry and Commerce.

Only 13% predict an improvement in the next 12 months, while 35% are bracing for the situation to deteriorate.

“We see no sign of a self-sustaining upswing so far,” DIHK Managing Director Martin Wansleben said in a statement. “On the contrary, companies have revised their investment plans, which are important for this, and their hiring intentions downward — both into negative territory.”

The business group, which forecast in May that the German economy would stagnate this year, now predicts a 0.5% contraction, followed by no growth in 2024. Both forecasts are less optimistic than the government’s latest estimates.

This view is supported by business surveys released earlier this week by S&P Global that showed private-sector activity contracted at a steeper pace this month than in September. Still, an expectations index from the Ifo institute on Wednesday pointed to a slight improvement in the business outlook.

Germany hasn’t recorded expansion in more than a year and economists see a mild recession in the six months through December due to the energy crisis, weak Chinese demand and higher interest rates.

According to DIHK, the cost of energy and raw materials is the biggest concern, followed by Germany’s lack of skilled labor, as well as weak domestic demand. Among industrial companies, optimism has decreased, with half seeing a poor situation and half a good one.