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    KfW Research

    KfW SME Panel

    Edition 2023

    SMEs’ resilience is being put to the test. So far, they have come away with few bruises but now they are increasingly nervous

    The resilience of small and medium-sized enterprises was put to the test again last year. But despite all stress factors, the losses to SMEs were moderate. Investments and turnover grew, including on a price-adjusted basis. Still, their profit margins came under pressure, even with part of the costs passed on to customers. Their capital structure, however, is showing itself to be robust overall. They have a comfortable liquidity position and their debt sustainability continues to be ensured. Their equity base remained stable despite the energy crisis. Currently, however, they are sceptical about how their business will develop. The economic outlook is dim, prospects for investment and turnover have clouded over and access to credit is becoming more difficult. These are the findings of the KfW SME Panel 2023, which paints a comprehensive picture of the present situation in autumn of 2023 and on the development of small and medium-sized enterprises during the past year.

    Comments from KfW's Chief Economist

    Dr. Friederike Köhler-Geib

    “Since 2020, overlapping crises have put the resilience of Germany’s SMEs through a gruelling test. Nonetheless, despite all the stress factors such as the war in Ukraine, the energy crisis and rising prices, the bruises sustained by small and medium-sized enterprises have remained manageable even in 2022”. This year, however, economic headwinds are putting increased strain on businesses. They are now rather sceptical about their business prospects. And even though the credit channel remains open, it is becoming more difficult for them to negotiate loans.”

    "Despite the difficult economic environment, SMEs considerably expanded their investment activity in the past year, showing themselves to be a cornerstone of all economic activity. More than four in ten euros invested came from a small or medium-sized enterprise in 2022. Investment activity in manufacturing also developed more positively than many had expected.”