KfW Research: Sentiment among German SMEs stagnates

• KfW ifo Business Climate Index is treading water
• However, SMEs’ expectations for the next six months are more favourable than they were last month
• Large enterprises are slightly more pessimistic about the future than before

The mood in the German SME sector is currently moving sideways. Business confidence had continued to recover in October. That recovery has stagnated in November. The SME business climate index stood at -14.5 points after -14.6 points in the previous month. With that, sentiment continues to be much worse than the long-term average represented by the zero line.

“The hoped-for strong rebound is not yet in view. The upward momentum of SME business sentiment has weakened overall since the summer. But we also see that SMEs still believe the economic situation will improve. Their six-month business expectations continue to move in the right direction, if only slowly,”

said Dr Dirk Schumacher, Chief Economist of KfW.

Expectations rose by 0.4 points to now -9.6 balance points. SMEs rate their current economic situation slightly worse than in the previous month, with the index falling by 0.3 points to -19.8 balance points.

These are the findings of the KfW-ifo SME Barometer. In it, KfW evaluates the findings of the ifo Institute’s economic surveys, broken down by company size classes and main economic sectors.

Unlike SMEs, large enterprises had significantly worse business expectations in November. They dropped by 5.5 points to -9.1 balance points. At the same time, large enterprises rated their current situation slightly better than they did in the previous month. Their business climate index dipped slightly to -17.3 balance points.

“The expectations of large enterprises have fluctuated very much for months. This is partly because large enterprises are dependent on exports – much more than German SMEs. Given the uncertain geopolitical and trade policy situation, large enterprises’ export expectations are currently fluctuating wildly as well,”

said Schumacher.

The current KfW-ifo SME Barometer can be downloaded from: KfW-ifo SME Barometer | KfW

^{KfW supports SMEs with a number of promotional programmes on behalf of the Federal Government. More information is available at We are strengthening the SME sector (German page).}