Lowest Ranking in the European Union (EU) Community for Germany

Punk Construction Sites: German Small Biz Slam Poor Conditions, Blame Politics

Germany Receives Poor Evaluations from Small Businesses - Lowest Ranking in the European Union (EU) Community for Germany

Baggage, sky-high power costs, and tech lag: That's the abrasive assessment Germany receives as a business hub from small and medium-sized enterprises (SMEs). As per a Forsa survey sponsored by Commerzbank, Germany slips to 9th position among economic nations, trailing Italy and Vietnam.

Hardly 10% of the 1,525 companies surveyed between November mid-point and February mid-point rated Germany's conditions as "excellent" or "good." A whopping 60% find them "decent" or "acceptable," whereas nearly a third (29%) consider them "inadequate" or "insufficient."

A staggering 71% of the SMEs, regardless of industry, feel that the "Made in Germany" tag has dramatically lost its sheen. Economy optimists pin their hopes on a fresh federal government to inject positivity.

Trade squabbles stir up discord

The trade skirmish with the US stirs up more chaos. Reports indicate numerous businesses actively scouting for new markets and planning to hike prices to wrangle with escalating tariffs.

A survey by DZ Bank paints a grim picture for the metal, auto, and machinery sectors, which face potential severe adverse effects from US tariffs and counter-tariffs. 15% of the 1,007 SMEs reckon they're directly targetted by higher US tariffs, while 50% worry about indirect effects like inflated costs from suppliers.

Fear of EU counter-retaliations

Potential EU counter-tariffs might weigh heavier on SMEs. Nearly a third (29%) of companies foresee higher procurement costs, and 46% dread impacts on suppliers if counter-tariffs materialize.

Data for the DZ Bank survey was compiled in March – prior to US President Donald Trump announcing his XXL tariff package. However, it was already known that the US would slap 25% tariffs, for instance, on car and steel imports. In early April, Trump flirted with the idea of imposing generally 20% additional duties on imports into the US, which are currently shelved. The EU, too, has postponed planned counter-tariffs on US goods and favors negotiated resolutions.

• Small and Medium-Sized Enterprises
• Shoddy Business Conditions
• Politics
• USA
• Europe
• Digital Transformation
• Germany
• Federal Government
• Frankfurt am Main
• Trade Squabbles
• Forsa
• Commercbank
• Italy
• Vietnam

Backstory:

Small and medium-sized businesses (SMEs) in Germany nurse discontent over burdensome bureaucracy, high energy costs, and slow digitalization. A Forsa survey funded by Commerzbank ranked Germany 9th among economic nations, with just 10% of 1,525 businesses rating conditions as "very good" or "good." 60% see the conditions as "satisfactory" or "adequate," while 29% view them as "inadequate" or "insufficient."

This stinging critique follows the German government's ambition to boost exports and build more infrastructure to counter economic doldrums. However, SMEs plead for tax relief and easier regulatory procedures to level the playing field.

Trade tussles with the US intensify concerns among SMEs, particularly in the metal, auto, and machinery sectors. These industries worry about higher costs, reduced competitiveness, and increased uncertainty following US tariffs and counter-tariffs.

Supply chain disruptions and heightened regulatory complexity are also a cause for concern for SMEs. Many worry about EU counter-tariffs, which could further escalate input costs and strain already fragile industry relationships.

Details:

• The trade spat between the US and Germany is causing a ruckus. SMEs say they are actively hunting for alternative markets and plan to raise prices to offset higher tariffs.
• A survey by DZ Bank indicates that companies in the metal, auto, and machinery sectors expect negative impacts from US tariffs and counter-tariffs. Around 15% of the 1,007 SMEs see themselves directly impacted, while 50% anticipate indirect effects like increased supplier prices.
• Additionally, potential EU counter-tariffs could hit SMEs harder. If introduced, 29% of companies foresee higher purchase prices, and 46% fear the impact on their suppliers.
• The survey was conducted in March, before US President Trump announced a substantial tariff package. However, it was already common knowledge that the US would impose 25% tariffs on car and steel imports, among other items. In early April, Trump suggested imposing 20% additional duties on imports into the US, which have since been put on hold. The EU has also shelved planned counter-tariffs on US goods, hoping for a negotiated solution to the ongoing trade impasse.
• Overall, the trade standoff between the US and Germany poses a significant challenge for SMEs, particularly those in the metal, auto, and machinery sectors. These challenges include increased costs, reduced competitiveness, and regulatory unpredictability.

1. The stinging critique of Germany's business conditions by Small and Medium-Sized Enterprises (SMEs) follows their plea for tax relief and easier regulatory procedures, as they nurse discontent over burdensome bureaucracy, high energy costs, and slow digitalization, making it increasingly difficult for them to compete in the global market.
2. Amidst this discontent, trade squabbles, especially with the USA, are stirring up more chaos, as numerous businesses actively scout for new markets and plan to hike prices to wrangle with escalating tariffs.
3. The metal, auto, and machinery sectors, which form a significant part of the German economy, face potential severe adverse effects from US tariffs and counter-tariffs, with 15% of the SMEs recognizing themselves as directly targeted by higher US tariffs, while 50% worry about indirect effects like inflated costs from suppliers.
4. Fear of EU counter-retaliations adds to the concerns, as nearly a third (29%) of companies foresee higher procurement costs, and 46% dread impacts on suppliers if counter-tariffs materialize.
5. Between Politics and business, Frankfurt am Main, as the financial hub of Germany, bears the brunt of these difficulties, with Commerzbank sponsoring surveys that reveal Germany slipping to 9th position among economic nations, trailing Italy and Vietnam.
6. The federal government is hoped to inject positivity and provide much-needed relief to the SMEs in Germany by addressing the issues plaguing the community policy - be it vocational training, digital transformation, or reducing bureaucratic red tape - to strengthen the country's standing in the global economy and restore the "Made in Germany" tag to its former glory.

Read also: