Building in Germany: SMEs Express Concerns and Frustrations
Small enterprises and mid-sized corporations in Germany express dissatisfaction with the current business environment - Lowest Ranking in the Union for Germany within Community Context
Small and Medium-sized Enterprises (SMEs) throughout Germany are voicing their dissatisfaction with the country's construction sites, citing excess bureaucracy, high energy costs, and insufficient digitalization as key concerns. In a recent survey by Forsa for Commerzbank, Germany ranks ninth among economic nations, trailing behind Italy and Vietnam.
The survey reveals that only 10% of the 1,525 companies polled between late 2021 and early 2022 rate Germany's conditions as "very good" or "good." A hefty 60% consider them "satisfactory" or "adequate," while nearly a third (29%) describe them as "inadequate" or "insufficient."
A significant majority of 71% of the companies across all industries believe that the "Made in Germany" quality seal has significantly lost its significance. The economy predicts that a new federal government could offer encouraging signs, but the ongoing trade dispute with the United States adds uncertainty to the mix.
Trade Tensions with the US
The trade standoff with the US is causing increased apprehension. Many companies are reportedly actively pursuing new market opportunities for their products, preparing to increase prices to cover the higher tariffs.
According to a DZ Bank survey, the metal, automotive, and machinery sectors are specifically anticipating significant negative impacts from US tariffs and counter-tariffs on their businesses. In total, 15% of the 1,007 SMEs surveyed anticipate direct effects from higher US tariffs, and 50% fear indirect consequences, such as through higher supplier costs.
EU Counter-tariffs and their Implications
although counter-tariffs from the European Union could affect SMEs more severely: If these are introduced, nearly a third (29%) of companies expect higher purchase prices, and 46% anticipate impacts from suppliers.
Data for the DZ Bank survey was obtained in March, prior to US President Donald Trump presenting his extensive tariff package. However, it was already known that the US would impose 25% tariffs on items like cars and steel. In early April, Trump threatened the EU with additional 20% tariffs on imports to the US. These tariffs are currently on hold. The EU has also paused planned counter-tariffs on US goods, hoping for a negotiated solution.
Focusing on Opportunities Remains Crucial
SMEs should continue to examine avenues for growth and innovation, despite the challenges posed by the trade tensions and local environmental conditions. Fostering cybersecurity measures, engaging in green energy projects, and attracting more foreign investment could help alleviate some of the pressure.
- SMEs
- Location Germany
- Construction site
- USA
- Digitalization
- Germany
- Frankfurt am Main
- Trade dispute
- Forsa
- Commerzbank
- Europe
- Italy
- Vietnam
- Cyber Security Support
- EU Counter-tariffs
- SMEs in Germany are particularly concerned about the insufficient digitalization on their construction sites, exacerbating the already frustrating excess bureaucracy and high energy costs.
- Despite the dissatisfaction with the local conditions, SMEs are still anticipating the potential positive changes that a new federal government might bring, albeit with the ongoing trade tensions with the USA adding uncertainty.
- The metal, automotive, and machinery sectors in Germany are specifically preparing to face significant negative impacts from US tariffs and counter-tariffs, with 50% of SMEs fearing indirect consequences through higher supplier costs.
- As SMEs grapple with the challenges posed by the trade tensions and local environmental conditions, they should focus on opportunities for growth and innovation, such as fostering cybersecurity measures, engaging in green energy projects, and attracting more foreign investment to alleviate some of the pressure.
