The mood in German medium-sized businesses is in the basement

The mood of medium-sized businesses in Germany deteriorated further in spring 2024. This is shown by the current study by Creditreform Wirtschaftsforschung from Neuss, for which around 1,250 small and medium-sized companies were surveyed.


The Creditreform business climate index (CGK), which assesses the economic situation in medium-sized companies, fell to minus 1.4 points. For the first time since spring 2009, the sector has recorded a predominantly negative mood.



“The hope of an economic recovery after the third year of crisis will not be fulfilled. The mood among medium-sized businesses has not been as bad as it is now since the global financial crisis,” says Patrik-Ludwig Hantzsch, head of Creditreform economic research. Business expectations are more pessimistic than last year and are at their lowest level in 15 years. The current weak construction economy and industrial production are significantly slowing down business development in medium-sized companies. In addition to the wars in Eastern Europe and the Middle East, current economic policy also contributes to the high level of uncertainty.


Economic recovery postponed

“The weakening of inflation has not yet had any positive effects on companies,” explains Patrik-Ludwig Hantzsch. The aftereffects of inflation continue to predominate. The further development of orders and sales is assessed more pessimistically among medium-sized companies than in previous years. Only 21.9 percent of those surveyed expect an increase in orders in the coming months, while 17.6 percent fear declines. Slight economic stimulus is only possible in the service sector.


High financing costs and pessimistic economic prospects also significantly dampen the willingness to invest. Currently only 43.9 percent of those surveyed are planning an investment project (previous year: 52.8 percent). The propensity to invest in medium-sized companies is now as low as it was during the financial crisis in 2009. Hantzsch says: “Without investments, companies lose competitiveness. This is a heavy burden for the future of Germany as a business location.”


Winter half-year: predominantly falling sales

In the past winter half of the year, sales development in medium-sized companies was already very subdued. With a share of 31.7 percent, negative sales reports predominated, while 23.9 percent of companies recorded an increase in sales. In addition, the recession noticeably affected the willingness to hire new employees. In the survey, 18.5 percent of respondents reported a reduced workforce, while 18.0 percent reported increased headcount. “For the first time in almost 20 years, employment in medium-sized businesses has stopped growing. “This can be understood as a warning signal for the labor market,” said Creditreform spokesman Hantzsch. The current personnel planning in medium-sized companies is even more cautious than during the Corona period.




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