The energy crisis and rising prices for many raw materials and primary products are causing problems for German medium-sized companies. According to a survey, the majority of companies are pessimistic about the future. But there is also reason for hope.
Rising energy and raw material costs are increasingly becoming a burden for Germany’s medium-sized companies. “In particular, the extremely sharp rise in prices for many raw materials and preliminary products and the ongoing supply bottlenecks are causing medium-sized companies more and more concerns and risks,” stated DZ Bank and the BVR banking association in their most recent SME survey. “As a result, the vast majority of medium-sized companies feel compelled to increase their sales prices.”
More than 80 percent of the more than 1,000 companies surveyed – and thus more than ever since autumn 2013, when this topic was first asked in the survey – are concerned about the extremely high prices for energy and materials. According to the information, never before have so many companies intended to raise their prices since the survey began in 1995: 69 percent of medium-sized companies in Germany want to raise their prices in the next six months, and less than 2 percent want to lower them.
While companies see the corona pandemic less and less as a business risk, the war in Ukraine and the associated economic upheaval are depressing the mood among German SMEs. The survey concludes that the number of pessimists now predominates. Not only have business expectations clouded over since the previous survey in autumn, SMEs in all sectors – with the exception of the electronics industry and the chemical, pharmaceutical and plastics industries – also assess the current business situation as weaker overall this spring than they did a good half ago Year.
“The many uncertainties in the market mean that medium-sized companies want to keep liquidity in the company,” said Uwe Berghaus, board member for corporate customers at DZ Bank. “We actually need a real investment offensive. Especially when it comes to sustainability and technological innovations, companies have to spend money now in order to remain competitive in the future.”
A glimmer of hope according to DZ Bank and BVR: SMEs were able to close 2021 with solid business figures. “The robust balance sheet quality is a solid starting point for medium-sized companies,” said BVR board member Andreas Martin. “It makes me optimistic that companies will eventually master the second global crisis in a row.”
