KfW's logo on the head office of KfW banking group. (picture alliance/dpa)
Despite the economic slowdown, Germany's small and medium-sized companies have so far held their course. However, after reaching record levels in 2018, the pace of growth is now expected to slow down, as can be seen from the SME panel of the state-owned development bank KfW that was published on Tuesday.
While large export-oriented industrial groups have recently lowered their profit forecasts and are planning to cut jobs, Germany’s approximately 3.8 million SMEs are largely holding their course. Employment, sales and investments are even expected to increase further. "But the momentum is slowing noticeably - the long-running upswing seems to be running out of steam," said KfW economist Michael Schwartz. This indicates the end of the record years for SMEs, even if the level is likely to remain high for the time being.
At the end of 2018, 31.7 million people were employed in small and medium-sized companies - a record figure and an increase of 391,000 on the previous year. Thanks to the strong domestic economy, German SMEs - which are more focused on the domestic market - increased their sales in 2018 by an average of 4.9 percent compared to the previous year. KfW considers companies with an annual turnover of less than €500 million to be SMEs. More than 10,000 companies took part in the survey.
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