Medium -sized business in need: sales of 4.6 percent shocked entrepreneurs

Medium -sized business in need: sales of 4.6 percent shocked entrepreneurs

The location of the small and medium-sized companies (SME) in Germany shows darkly how the current medium-sized panel of the KfW banking group shows. According to a large -scale survey that analyzed developments in the past financial year 2023, many of these companies have to fight with considerable sales declines. Compared to the previous year, companies suffered average sales loss of 4.6 percent, which corresponds to a decline of 246 billion euros to a total of 5.1 trillion euros. A particularly alarming aspect is that even price increases were not sufficient to compensate for this decline; Real is the sales of sales even in alarming 10 percent.

The KfW survey refers exclusively to companies with an annual turnover of a maximum of 500 million euros and records a total of 32.83 million employees in Germany. Despite these declining sales, the average sales return of 7.0 percent seems to be stable, while the equity ratio has slightly fallen to 30.6 percent.

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The forecasts for the future continue to be pessimistic. Around 35 percent of the respondents expect falling revenues in the current year, while only 15 percent hope for increasing sales. The medium -term outlook until 2026 is particularly striking, where 29 percent of the companies surveyed see their turnover - a record value in this survey.

Without a doubt, the current economic situation has also reduced the willingness to invest of the companies. The proportion of companies willing to invest has dropped by 4 percentage points to 39 percent compared to the previous year. This means that negotiations with banks on investment loans become less common and more complicated. Smaller companies are increasingly reporting failed negotiations and rejected credit lines.

Michael Schwartz, KfW economist, expresses itself optimistic about the results, but recognizes serious cracks in the foundation of the German economy. Despite this stable basic structure of the companies, the challenges that arise from the current economic situation are apparently increasingly serious.

For further information on this topic and the potential effects on medium-sized companies, see the current reporting on www.rhein-zeitung.de .