Business sentiment among small and medium-sized enterprises (SMEs) in Germany has remained largely unchanged in November, according to the latest KfW-ifo SME Barometer. The index, which measures business confidence, stood at -14.5 points this month, only a slight improvement from -14.6 points in October. This level remains well below the long-term average.
Dr Dirk Schumacher, Chief Economist of KfW, commented on the findings: “The hoped-for strong rebound is not yet in view. The upward momentum of SME business sentiment has weakened overall since the summer. But we also see that SMEs still believe the economic situation will improve. Their six-month business expectations continue to move in the right direction, if only slowly.”
Expectations among SMEs for the next six months increased by 0.4 points to -9.6 balance points. However, their assessment of their current economic situation declined slightly, with that index falling by 0.3 points to -19.8 balance points.
The KfW-ifo SME Barometer evaluates data from economic surveys conducted by the ifo Institute and breaks down results by company size and main sectors.
In contrast to SMEs, large enterprises reported more pessimistic expectations for future business conditions in November; their expectations dropped by 5.5 points to -9.1 balance points. At the same time, these companies rated their current situation slightly better than last month, though their overall business climate index decreased marginally to -17.3 balance points.
Schumacher explained: “The expectations of large enterprises have fluctuated very much for months. This is partly because large enterprises are dependent on exports – much more than German SMEs. Given the uncertain geopolitical and trade policy situation, large enterprises’ export expectations are currently fluctuating wildly as well.”
KfW continues to support SMEs through various promotional programmes commissioned by the Federal Government.