KfW-ifo SME Barometer: German SMEs optimistic about the future despite recent truce in the trade conflict between US and EU

  • Business sentiment of small and medium-sized enterprises continues to improve
  • Large enterprises are also more optimistic
  • Robust upswing, but many risks remain

Frankfurt am Main, 11-Sep-2018 — /EuropaWire/ — With the recent truce in the trade conflict between the US and the EU, German SMEs are again much more optimistic about the future, according to the current KfW-ifo SME Barometer. The SME business climate improved by 2.6 points to 17.3 balance points in August, the second consecutive rise. Expectations rose by a vigorous 4.8 points to 7.1 balance points, which is close to the respectable level at the start of the year. Situation assessments remain on a historically high level of 28.2 balance points, highlighted by SMEs’ continuing high satisfaction with their current business.

The business climate among large enterprises also improved in August (+1.5 points to 12.6 balance points). Large firms corrected their expectations upward by 3.5 points. At now 3.3 balance points, their expectations indicator is slightly above its long-term average again for the first time in three months. At the same time, their assessments of the current business situation are still quite positive irrespective of the minor setback (-0.9 points to 22.7 balance points).

The positive business sentiment extends beyond the export industries. Almost all domestically-oriented sectors were also more upbeat than in July, which attests to the continuing strong domestic demand. The construction sector underscored its present exceptional position yet again, with business sentiment climbing to the second new consecutive all-time high among both SMEs (+1.5 points to 38.2 balance points) and large construction enterprises (+6.2 points to 38.8 balance points).

“The upswing continues in challenging international conditions. I expect robust growth of 1.8% for Germany this year”, said Doctor Jörg Zeuner, commenting the positive findings of the KfW-ifo SME Barometer in August. At the same time, however, the Chief Economist of KfW Group pointed out that the significantly more optimistic expectations have also considerably raised the bar for further developments in trade issues. “Now that hopes have been raised, a renewed escalation in the trade conflict, which cannot be ruled out by any means, would cause great disappointment that could see companies cut back investments significantly”, said Zeuner. “In addition to US protectionism, the uncertain outcome of the Brexit negotiations, the Italian government’s fiscal policy and the crisis in Turkey are key risk factors that we need to keep an eye on.”

The current KfW-ifo SME Barometer (available in German only) can be downloaded from: www.kfw.de/mittelstandsbarometer.



Ms. Christine Volk
Phone +49 69 74 31 38 67
Fax +49 69 74 31 32 66


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