KfW SME Panel: German SMEs Show Resilience Amid Economic Headwinds
Small and medium-sized enterprises (SMEs) in Germany have demonstrated stability despite challenging economic conditions. In 2024, their total turnover saw a slight increase of two percent, reaching EUR 5.2 trillion.
German small and medium-sized enterprises (SMEs) have proven resilient amid significant economic headwinds. In 2024, the total turnover for the 3.87 million SMEs grew by two percent to EUR 5.2 trillion. While this represented a one percent drop in real terms, it was a marked improvement from the ten percent decline experienced the previous year.
SMEs continue to serve as the employment engine of the German economy. The total workforce in these companies climbed by 207,000 to 33.01 million people, marking a record high. Over the past two decades, employment in SMEs has grown by approximately seven million.
These findings come from the KfW SME Barometer, a representative survey of the entire German SME sector, which included 13,079 companies. The average equity ratio for SMEs increased slightly to 30.7 percent in 2024, with a noticeable decrease in undercapitalized firms.
However, the appetite for investment among SMEs remains weak. Only 39 percent of businesses implemented investment projects, a figure that has remained stagnant and is close to an all-time low. KfW's Chief Economist, Dr. Dirk Schumacher, noted that while SMEs are resilient, they face pressure from rising costs and subdued investment, highlighting the importance of supporting this sector for Germany's economic future.