• KfW-ifo SME Barometer dropped sharply in April
• Sentiment fell significantly in all sectors – large enterprises exhibit greater stability
• Sales price expectations continue to rise

Business confidence among German SMEs has plunged as a result of higher energy prices and supply chain disruptions from the Middle East war. The index of the KfW-ifo SME Barometer fell by 4.1 points to -22.4 points in April, slipping below the level recorded during the energy crisis of 2022. Assessments of the current business situation worsened considerably and business expectations dropped significantly.

Each month, the KfW-ifo SME Barometer surveys more than 9,500 businesses from all relevant economic sectors on their current situation and expectations, broken down by enterprise size.

Among SMEs, sentiment fell across all sectors. The downturn was most pronounced in the construction industry, which recorded a drop of 10.4 points to -17.5 points. This development is mainly due to higher interest rates and possible price hikes for petrochemical building materials. Retailers and service providers also continue to face a difficult situation from increased fuel costs and weaker consumer purchasing power.

Sentiment among large enterprises remained somewhat more stable in April. Their situation assessments even improved slightly while expectations dimmed further. Large construction firms were the main reason confidence levels remained more stable as they are likely to benefit more from government contracts.

Sales price expectations rose most notably, climbing by 8.9 points to 20.7 points among SMEs and even by 10.5 points to 20.0 points among large enterprises. Although these expectations remain below the level before the energy price crisis of 2022, ongoing price increases could prompt the European Central Bank to lift the key interest rate from early summer. That would put a dampener on economic activity in the coming year as well.

“Rising prices, economic uncertainties and geopolitical tensions have sent business confidence among SMEs into freefall again,”

said Dr Dirk Schumacher, Chief Economist of KfW.

“However, should the war end soon, the fiscal-policy impetus still provides a real chance for significant growth this year and further acceleration in 2027.”

The current KfW-ifo SME Barometer can be found at:

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).