Digital economy in Germany continues to grow

While many industries are struggling with weak demand, Germany's digital economy continues on a robust growth course. The industry association Bitkom forecasts growth of 4.4 percent to 245.1 billion euros for 2026. This would surpass the previous year's growth: in 2025, the market for information technology and telecommunications (ITK) had grown by 3.9 percent to around 235 billion euros.

However, according to Bitkom, the development of employment figures is not keeping pace with market growth. This year, only around 11,000 new jobs, or 0.9 percent, are expected to be created, resulting in a total of 1.36 million positions. Last year, the increase was even only 0.2 percent. Bitkom President Ralf Wintergerst explained the flattening of job growth compared to earlier times, among other things, by the fact that companies are trying to mitigate the ongoing shortage of skilled workers with labor from abroad. The growing use of AI could also have a dampening effect here.

As in the previous year, information technology was the growth driver for the industry. For 2026, the association expects sales of 170 billion euros in Germany (plus 5.8 percent). The growth is once again driven by the software business, which grew by 10.2 percent to 58.3 billion euros. A significant portion of this is generated with software for operating public clouds. Sales of this software alone are expected to bring in 38.3 billion euros (+16.4 percent) this year.

Artificial intelligence, starting from a comparatively low level, is also gaining momentum as expected. The projected volume for AI platforms is expected to increase by 61 percent to 4.1 billion euros.

IT services and hardware grow solidly

With 3.5 percent to an expected 54.3 billion euros, IT services business continues on a solid growth course. Cloud-based services now account for around two-thirds of sales, at 35.7 billion euros. The market for IT hardware is growing slightly faster than the service business, at 3.9 percent to 57.4 billion euros. The most important growth driver here remains the Infrastructure-as-a-Service segment, which, according to Bitkom's forecast, is expected to grow by 21.0 percent this year.

Growth expectations for the remaining market segments, such as workstations (plus 5.1 percent), mobile PCs (plus 4.5 percent), or servers (plus 4.3 percent), are significantly lower. In the tablet business (minus 3.5 percent) and the consumer electronics segment (minus 3.2 percent), providers will have to adjust to slightly declining sales.

For the telecommunications sub-market, Bitkom forecasts sales growth of 1.2 percent to 75.1 billion euros. Revenues from TK services are expected to increase by 1.3 percent to 54.1 billion euros. In contrast, the business with end devices is slightly declining at minus 1.2 percent to 12.5 billion euros. One reason cited for this is the longer usage period of smartphones. Fiber optic and 5G network expansion, on the other hand, ensure that more money flows into telecommunications infrastructure (8.5 billion euros, plus 4.6 percent).

The overall positive sales development is not reflected in the general mood of the industry. This is significantly worse, as can be seen from the Bitkom-ifo Digital Index. At the end of the year, the index, which is calculated from the current business situation and business expectations of companies, was again below zero with minus 4.0 points after a small interim high. While companies still rate their current business situation as slightly positive with plus 1.7 points, business expectations are significantly more subdued with minus 9.4 points.

(mho)