German SME sector in splendid mood

For the second time in a row, business conditions among Germany’s small and medium-sized enterprises (the SME sector) have reached a new all-time high in the autumn edition of our VR SME Survey: Nine out of ten SMEs assess their current situation as „good“ or „very good“. What’s more, eight out of ten SMEs are planning to invest in their company in the months ahead. That too is a new record.

Foreign business continues to play a crucial role in the SME sector. More than half of the companies surveyed are engaged in foreign activities. While operating across the globe, SMEs show a clear preference for the countries of the European Union and the Euro area. The SME sector is therefore able to profit from the good economic development in Germany and Europe.

The upbeat sentiment among SMEs is also reflected in the labour market. 27.8 percent of companies plan to recruit extra staff in the next half-year. However, the employment drive of small and medium-sized companies continuing since 2010 is reaching its limits, with nearly 80 percent of SMEs now concerned about the shortage of skilled workers. A year ago it was a good 70 percent and in the autumn survey 2013, the first time we asked for an assessment of the shortage of skilled workers, it was even only 57 percent.

Another cause of concern for more than one in four SMEs is the question of company succession, with the kind of operational handover not the only issue in focus. Nearly half of those concerned also see pressure in daily operations. Almost as many find it difficult making the break from the company and are worried about the continued employment of their workforce as well as the future of the company site. All in all, however, the German SME sector is in excellent shape as the year draws to a close.

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