SME Woes in Germany: A Failed Construction Site Called 'Location Germany' 🚧
Small and Medium Enterprises (SMEs) rate Germany's location unfavorably - Germany Experiences Lowest Ranking in the Union
Germany's SMEs are pulling out their hard hats in frustration, giving the nation a shoddy review in a Forsa survey for Commerzbank. With approximately 90% of the 1,525 companies polled between mid-November and mid-February rating the German landscape as "meh" or worse, Germany ranks 9th among economic nations – falling behind even Italy and Vietnam.
Only 10% of these companies crown the framework conditions in Germany as "top-notch" or acceptable. A whopping 60% find these conditions tolerable or alright, and nearly a third (29%) deem them "underwhelming" or "disappointing."
An overwhelming 71% of the cross-industry companies surveyed believe the "Made in Germany" seal has significantly lost its former glory. There's a palpable hope in the economy that a new federal government will inject some pizzazz.
🗞️ Trade tiff adds to the confusion
The ongoing trade squabble with the Americas stirs up additional uncertainty. Numerous companies are reportedly hunting for new sales territories and planning price hikes to offset higher tariffs.
According to a survey by DZ Bank, companies in the metal, automotive, and machinery sectors, in particular, foretell some dismal predictions for their business due to US tariffs and counter-tariffs. In total, 15% of the 1,007 SMEs surveyed view themselves as direct victims of increased US tariffs, while 50% dread being indirectly influenced – such as via inflated supplier prices.
🔥 Fear of EU counter-tariffs could fan the flame
Potential counter-tariffs from the European Union could potentially burn SMEs even more: If deployed, almost a third (29%) of companies expect elevated purchase costs, and 46% fear effects on their suppliers.
The data for the DZ Bank survey was gathered in March – just before US President Donald Trump unveiled his grandiose tariff plan. Nevertheless, it was already understood that the USA would impose 25% tariffs, for example, on car and steel imports. In early April, Trump threatened the EU with additional tariffs of generally 20% on imports into the USA, which are at the moment on freeze. The EU also put planned counter-tariffs on US goods on ice for now, hoping for a negotiated solution.
🚨 SMEs🏡 Location Germany🏗️ Construction site🇺🇸 USA📱 Digitalization🇩🇪 Germany🇫🇮 Federal government*
- The employment policy in EC countries, particularly in Germany, is a significant concern for SMEs, as evidenced by the Forsa survey for Commerzbank, where the majority of companies rated the business environment as underwhelming or disappointing.
- In the ongoing trade dispute with the USA, German SMEs are not only worried about the immediate impact of tariffs on their industries like metal, automotive, and machinery, but also fear potential counter-tariffs from the EU, which could lead to increased purchase costs and supplier issues.
