Economy: Small and medium-sized businesses are concerned about Germany’s competitiveness

Economy: Small and medium-sized businesses are concerned about Germany’s competitiveness

Corona, the Ukraine war, the energy crisis, inflation – the German economy has been in crisis mode for years. Many companies have to adapt – and the state also sees a challenge.

In view of the ongoing crises of the past few years, more and more medium-sized companies in Germany are being forced to make fundamental adjustments in their own companies. More than a third of over 1,000 companies (36 percent) that DZ Bank surveyed now consider restructuring to be relevant in the short term. During the energy crisis a year ago it was a quarter. Companies are struggling with increased costs for energy and raw materials as well as the general economic weakness.

Three out of ten medium-sized companies in this country believe that a realignment of production or business activities is necessary. That is almost twice as many as a year ago at the height of the energy crisis, according to the economists at the leading cooperative institute. Medium-sized companies in energy-intensive sectors such as the chemical industry and the food industry are currently thinking about restructuring. The answers were given between September 18 and October 16, 2023.

Many see Germany as the “sick man” of Europe

Four out of five companies surveyed (81 percent) are of the opinion that Germany has lost competitiveness due to the crises of recent years. At least 46 percent, or almost half, of the 1,000 or so participants are of the opinion that Germany is currently the “sick man of Europe”.

After a mini-growth in the spring, German economic output fell slightly by 0.1 percent in the third quarter of this year compared to the previous quarter, according to official figures. Economists expect that Europe’s largest economy will continue to shrink for the year as a whole before things start to pick up again in 2024.

After all, the wish for relief in electricity prices, which two thirds of medium-sized companies expressed in the DZ Bank survey, has now been fulfilled. On Thursday, the federal government agreed on a package with several parts: In addition to an already agreed subsidy for network fees, which are part of the electricity price, the electricity tax for all manufacturing companies is to be reduced to the minimum value permitted in the European Union . The planned reduction should initially be regulated by law for the years 2024 and 2025.

Source: Stern

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