German SMEs fear significant cost increases this year
German SMEs fear significant cost increases this year according to a KfW survey. According to the survey conducted by the state development bank and published on a Wednesday in Frankfurt, around 80 percent of SMEs expect substantial higher costs. Energy prices, material and raw material prices, wages and salaries were mentioned as the main cost drivers. A total of 2795 companies participated in the online survey in April.
"A good news is that most SMEs stated they can cope with the higher cost burdens," explained KfW Chief Economist Fritzi Köhler-Geib. This shows how robust the German SME sector is set up. Around 48 percent of the companies stated they can permanently shoulder the higher costs. For 21 percent, the higher costs are almost insignificant financially. However, not all companies in the survey could absorb the cost increases: Around 14 percent stated that the significant additional burden would financially overwhelm them.
Approximately 51 percent of the companies expect their labor costs to increase. The second largest cost driver are expenses for materials, raw materials, semi-finished products and ingredients. Around 56 of the surveyed companies expect an increase in this area. Approximately 64 percent of the medium-sized companies expect to spend more on energy. In response to the cost increases, companies in the survey stated that they have raised their own product and service prices - an average of 11 percent. Another third of the SMEs plan to raise prices.
- Despite the expected cost increase in materials, raw materials, and energy, around 48% of the surveyed German Small and Medium-sized Enterprises (SMEs) indicated they can permanently absorb these additional costs.
- The KfW-Survey showed that, among the German SMEs, one in four considers the increased costs to be almost financially insignificant.
- The German survey of Small and Medium-sized Enterprises by KfW revealed that a significant number of companies, specifically 14%, are concerned that the substantial cost increase might financially overwhelm them.
