The business climate among small and medium-sized enterprises (SMEs) in Germany has shown a decline, according to the latest KfW-ifo SME Barometer. The index fell by 0.6 points to -21.9 balance points in February, falling below the long-term average zero line.
KfW Research, which evaluates the ifo economic surveys based on company size and main economic sectors, noted that SMEs have become more negative about their current situation and future expectations over six months. Situation assessments dropped by 0.7 points from January to -20.0 balance points, while business expectations declined by 0.4 points to -23.9 balance points.
Dr Philipp Scheuermeyer, an economic expert at KfW Research, remarked on a slight improvement in sentiment within manufacturing and wholesale sectors despite the overall downturn: “There appears to be a small glimmer of hope in the economic sectors that have been worst hit by the crisis.”
Scheuermeyer also noted that manufacturers' export expectations are improving: “Apparently, the protectionist ideas of US President Trump have hardly had any negative impact on the expectations of businesses. For now, the threats of tariffs may even have had the positive effect that firms are pulling exports forward.”
In contrast to SMEs, large enterprises reported a slight improvement in business sentiment for February with an increase of 1.3 points to -26.4 balance points. However, sentiment among large enterprises remains worse than among SMEs.