• Confidence is rising among SMEs of all sectors
• Positive trend among large enterprises as well

Sentiment in the SME sector has improved for the sixth consecutive month. The index rose 0.5 points to -7.8 points in October. Although that means the sentiment barometer remains below the zero line, which marks the long-term average, the current trend is in line with the series of positive sentiment and leading indicators of the past months. SMEs were more positive about both their current situation and their six-month business expectations than in September.

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

Oil and gas prices have increased again sharply of late, and a solution to the conflict between the US and Iran is not in sight. Against this backdrop, the continued improvement in business sentiment should be seen as particularly positive, said Dr Dirk Schumacher, Chief Economist of KfW. The fiscal stimulus and the demand for German intermediate goods to fuel the boom in AI infrastructure are likely to sustain the upswing. However, developments in the Gulf region remain a risk to the economy.

Confidence among large enterprises also improved in October, rising from -13.2 points in September to -9.7 points. Businesses held a slightly less favourable view of their current situation than in September, but their six-month business expectations jumped.

Employment expectations among businesses were disappointing in October, declining among both SMEs and large enterprises. What is nonetheless positive is that employment expectations have risen a great deal since early summer.

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).