Nearly 3 out of 5 German industry associations are pessimistic about the outlook for 2023, expecting high energy prices to cut output, a new survey published on Tuesday and cited by Reuters showed.

Of the 49 associations surveyed by the German Economic Institute (IW), 30 say they expect their members to produce less, and only 13 say they expect their sectors to increase production.

Almost 40 associations also said that the current situation for their companies is worse than a year ago, when most expected economic activity to resume as the COVID-19 pandemic is overcome.

But given strong inflationary pressures in Germany, the country’s economy has not recovered, according to a new survey conducted between mid-November and early December.

“Business does not expect high energy prices to drop to pre-crisis levels in the near future. This casts a huge shadow over the outlook for next year,” said Michael Gramling, one of IW’s economic experts.

He warns that the situation is even more dangerous for energy-intensive companies whose success depends on reasonable energy prices.

The new survey came after data released by the Federal Statistical Office in Berlin in early December showed that German exports fell more than expected in October.

While the drop was just 0.6 percent for the month, it was more than double what analysts in a Reuters poll had forecast.

Gloomy prospects for the economy of Germany, the “economic engine” of the EU

Germany’s main export partner, the United States, saw the largest drop in German exports at 3.9 percent, while exports to other European Union member states fell by 2.4 percent.

But German imports in October recorded their sharpest drop since the beginning of the year, falling 3.7%.

A drop in imports by 0.4% was forecast.

“Not only German consumers but also the export industry are going through tougher times,” said Andreas Scheurle, economist at DekaBank, after the data was released.

He also said that the world economy is reeling under the weight of rising prices and interest rates.

The German Chambers of Commerce and Industry (DIHK) said in November that German exports would fall by 2 percent next year due to a stagnant global economy, with almost half of German companies selling abroad expecting an economic downturn.