The war in the Middle East poses an additional challenge for SMEs’ international business, which is already suffering from US trade policy, growing competition from China and the declining competitiveness of Germany as a business location. Since 2023, foreign revenues of SMEs have been stagnating and companies expect hardly any impetus for growth over the coming three years either.

Many SMEs have already adapted to the changed conditions or are planning appropriate measures for the future. The focus is on broader diversification of export markets and, in some cases, a stronger focus on domestic customers or the EU internal market. In the manufacturing sector, more than one in three internationally active German SMEs is considering a (partial) relocation abroad or has already implemented such a move.

KfW Internationalisation Report 2026(PDF, 1 MB, accessible)

Press release

Germany in a global setting