(Reuters) - German companies feel pessimistic about the new year, with only 12.6% expecting business conditions to improve in 2025, according to a poll by the Ifo institute of some 8,000 firms published on Monday.

"No sector is really optimistic about 2025. A lot of work awaits the new German government," says Klaus Wohlrabe, head of surveys at Ifo. "In view of the fact that the economy has already performed poorly in 2024, these figures are worrying," Wohlrabe added.

The construction industry was most pessimistic, with less than 5% of companies expecting an upturn next year, while 15.7% of companies in the country's large manufacturing sector expected business conditions to improve next year.

In the chemicals industry, the nation's third-largest sector, 18.2% of businesses expected an upswing in 2025.

Beset with weak global demand, high costs and an industrial slowdown, Europe's biggest economy is on track to shrink for a second year running in 2024, with economic institutes forecasting another difficult year in 2025.

(Reporting by Rene Wagner and Andrey Sychev, editing by Rachel More)