More expensive energy, materials and higher wages: small and medium-sized businesses have to cope with rising costs. Many companies are finding a way out, which consumers will ultimately also feel.
A large majority of medium-sized companies in Germany expect rising costs, but can mitigate these with price increases. 80 percent of medium-sized companies expect significant cost increases for the current year, according to a survey by the state development bank KfW. The main drivers are higher wages and salaries as well as the prices for energy, materials and raw materials.
According to the study, 51 percent of companies stated in April that their wage costs would increase, and 14 percent expected an increase of more than 10 percent. Due to the high inflation of recent years, unions have pushed through significant wage and salary increases in many sectors.
When it comes to materials, raw materials, intermediate products and ingredients, the second largest cost block, 56 percent expect an increase this year, and 20 percent expect increases of more than 10 percent, according to the survey. 64 percent of medium-sized companies are also preparing for more expensive energy. Long-term contracts are making themselves felt here, despite prices falling again.
Many medium-sized companies can shoulder the burden
However, many medium-sized companies can counteract all of this. According to KfW, more than a third (39 percent) of the companies that expect price increases in at least one cost category have increased the prices of their own products and services – by an average of 11 percent. Another third (33 percent) are still planning price increases. Companies are also working on improving their energy efficiency. “The good news is that most medium-sized companies say they can cope well with the higher cost burden,” says KfW chief economist Fritzi Köhler-Geib.
48 percent of companies in the survey stated that they could shoulder the higher costs in the long term, while for a further 21 percent the increased costs were of little consequence. 14 percent stated that they were financially overwhelmed by the additional burden.
Since 2003, small and medium-sized companies with a turnover of up to 500 million euros have been regularly surveyed for the KfW SME panel. 2,795 companies took part in the current survey, which took place between April 15 and 25. According to KfW, the information is representative.
Source: Stern
