The energy crisis is affecting small and medium-sized companies in Germany after they have just overcome the corona shock. “Companies are coming under pressure, it’s a difficult environment,” said Fritzi Köhler-Geib, chief economist at the state development bank KfW, on Thursday at the presentation of the KfW SME panel. Thanks to the recovery after the Corona crisis, medium-sized companies are well positioned on average. They also showed a high level of adaptability. However, the effects of the energy crisis are severe.
According to the KfW survey, a slim majority of 53 percent of the companies assumed that they would be able to bear the currently high energy prices in the long term. “But the full price effects are yet to come through and some of the companies are already overwhelmed financially,” said Koehler-Geib. 13 percent of those surveyed in September stated that the high energy costs overwhelmed them financially in the long run.
Price increases make investment plans burst
According to the information, the burden is particularly high for energy-intensive companies in the manufacturing sector. Price increases were particularly noticeable there. According to KfW, the overall economic importance of medium-sized industry is comparatively high. “If a large number of these companies got into financial difficulties, the effects would be disproportionately high,” warned the economist.
Since the start of the Russian war of aggression in Ukraine, the mood in the almost 3.8 million small and medium-sized companies has deteriorated considerably. “After a very good year in 2021, there are signs that investment plans will burst, pressure on equity ratios and more difficult access to credit for the current year,” explained Köhler-Geib. Because of the great uncertainty, more investment plans are likely to burst in the current year than ever before. “An estimated 59 billion euros in investments could be lost to the economy.”
Recovery after the Corona crisis last year
According to KfW, small and medium-sized companies largely made up for the losses from the Corona crisis year 2020 last year. Total sales rose by EUR 242 billion to EUR 4,580 billion. The revenues thus approached the pre-crisis level of 2019 of 4615 billion euros.
At the same time, the SME job engine was running smoothly. According to KfW, 32.3 million people were employed in medium-sized companies, roughly the same number as before the Corona crisis. The importance of small and medium-sized companies with an annual turnover of up to 500 million euros for total employment has even reached a high of 71.9 percent.
