Germany’s steel and metals fabricators’ federation warns of continued pessimism among companies amid the ongoing climate of slow growth, Kallanish notes.
In a recent poll by the federation on the business sentiment among its members, 41% of respondents said they plan to lay off personnel. This concerns mostly small and medium-sized enterprises (SMEs), many of them family-owned, with a large share of automotive suppliers.
Companies are suffering not only from low demand on the market but also from a high level of bureaucracy, which urgently needs to be cut back, says WSM managing director Christian Vietmeyer. One critical development underlined by WSM is the “unprecedented flexibility” in the call-offs of carmakers.
A similar picture has been drawn by credit insurer Atradius, which states revenues of steel and metal working companies dropped by 10% from January to April. According to Atradius, 32% of companies have introduced short working hours, which is way above the average for processing/manufacturing industries of 13%. Atradius also observes an increase in bankruptcies and fears that 10% of companies could disappear in the next five years.
SMEs are hit harder in times of recession, states Datev, an IT provider organised as a cooperative by and for tax consultants, auditors and lawyers. SMEs are mostly rooted regionally, and cannot easily translocate production sites to other countries. They also rely very much on established personnel that are loyal to the location, Datev notes.
Datev has carried out a study based on business figures submitted by several thousand companies across all sectors, which in future could work as an index for forecasts by economic research institutes. According to the study, revenue across all companies in August was 5% lower than in August 2023. “That’s what it really looks like; it is a view into the engine room,” says Datev chairman Robert Mayr.
Christian Koehl Germany
