(Bloomberg) -- The German economy is failing to break out of stagnation as the current business climate is poor, with the manufacturing sector particularly weak, according to a survey of 24,000 companies by industry lobby DIHK.

“The hope of recent months that good international business or a pickup in domestic demand could act as a motor for domestic companies has not been confirmed,” DIHK Managing Director Martin Wansleben said on Thursday in a statement.

He added: “A weak domestic economy and tangible structural challenges continue to hold the economy in check.”

Only 28% of the companies polled rate their business situation as positive — compared with 29% at the start of the year — while 23% rate it as poor, up from 22%.

Just a quarter of companies are planning to increase their investments, while 31% of executives say they will have to cut back. The proportion of businesses planning to expand their capacity was only lower during the financial crisis and in 2003.

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