Many family-owned companies in Germany are facing trading problems as a result of the economic decline in India and China. A lot of further concerns are based on possibilities – what effect will there be if Great Britain leaves the EU if there are problems with Russia. The Mittelstand* is bracing itself for orders that don’t arrive or ones that get cancelled.
The issues do not affect Daimler, BASF or other large corporations as they can see further ahead and are still investing in the future. The problem is that the Mittelstand* makes up 98% of the companies exporting and they are affected by fears for the future and the drop in the commodities and stock market. There are reports that growth may dip below the forecasted 1.7%.
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Mahr CEO Stephan Gais claims that issues with Russia and fear of terrorist attacks are causing problems along with domestic investment delays. He feels 5% growth is realistic but does not plan on growth investment. An LFO Economic Institute survey showed that last year showed a major loss of confidence.
Expectations for the future is below zero and according to Klaus Borger of KfW Bank, it is news reports rather than actual economical events and trends. Micro—cap companies are also showing caution but blue-chip businesses are not so concerned Daimler, for instance, is investing in a future of electric cars.
Borger also believes that there is not a recession looming. Employment and wages are high and asylum seekers accommodated. However, Mario Ohoven – BVMW Mittelstand President wants more government investment and support.
*Mittelstand commonly refers to small and medium-sized enterprises in German-speaking countries, especially in Germany, Austria and Switzerland.
