According to the survey, the mood in German in the small and medium-sized enterprise sector have further deteriorated and remain under strain. Low investment activity and low consumption levels are seriously burdening companies' operations, the economic intelligence agency Creditreform reported. Middle class shows 'almost depressive characteristics' – said Patrik-Ludwig Hantzsch, head of Creditreform's economic research department. The mood is “as bad as at the height of the coronavirus pandemic, when no one knew yet how serious it would become.”
The study is based on a representative Creditreform survey of 1,200 small and medium-sized enterprises. It shows that recent economic activity has been disappointing and there is no prospect of positive economic momentum. One third of respondents had to come to terms with a decline in the number of orders, while only 18 percent recorded their increase. Only less than a quarter of companies have achieved an increase in turnover in recent months. For 20 years, there has not been such a negative business climate in the small and medium-sized business sector for two years in a rowHantzsch said. He added: “Positive mood at the beginning of the year, spread by economic and German experts government“was unfortunately premature.”
The situation deteriorated mainly in the processing industry and trade. The study shows that a particularly severe decline was recorded in the construction sector. Small and medium-sized companies that supply products to industry are under increasing pressure due to the current weakness of the economy, a the growing number of bankruptcies is just the beginningadded Patrik-Ludwig Hantzsch.
Low readiness to hire
The survey shows that almost 80 percent of representatives of medium-sized enterprises are dissatisfied with the economic policy of the German government. From the perspective of companies, the most urgent problems to solve are the reduction of bureaucracy and the shortage of qualified labor. According to the study, uncertain economic prospects and lack of financial liquidity inhibit the readiness to invest. Only 40 percent of companies plan them. This is more than in the previous year, but, according to Creditreform, it is less than the average in recent years.
Negative economic development also affected the labor market. Over 21 percent of companies – even more than in 2023 – reduced employment. According to data reason This is mainly due to the poor situation on the procurement market and the shortage of qualified labor. The willingness to hire has therefore fallen to its lowest level in the last ten years. Due to falling inflation, only about 30 percent increased prices sales compared to 40 percent in the previous year. However, a good 10 percent lowered them. (DPA/jar)
The article comes from the website Deutsche Welle