Construction Woes: Small Businesses Slam Germany's Conditions, Eye US Trade Disputes with Anxiety
Small and mid-sized businesses in Germany issue dismal evaluations - Germany ranked the least within the European Union's community in certain aspects.
In a Forsa survey commissioned by Commerzbank, Germany ranks low on small and medium-sized businesses' (SMBs) favored economic nations list. Out of 1,525 companies surveyed, a mere 10% deemed Germany's current conditions "very good" or "good". Nearly a third (29%) described them as "insufficient" or "inadequate".
These struggling SMBs pinpoint too much bureaucracy, high energy costs, and gaps in digitalization as major obstacles. Germany trails behind Italy and Vietnam in the economic nations rankings. A large majority (71%) of the surveyed companies believe the "Made in Germany" label has lost its significance.
With hopes for a new federal government, many businesses express optimism for positive impulses. However, the ongoing trade dispute with the USA adds to the uncertainty. Many companies are actively seeking alternative sales markets for their products and planning to increase prices to account for tariffs.
The metal, automotive, and machinery sectors expect the strongest negative impacts from US tariffs and counter-tariffs. In DZ Bank's survey of 1,007 SMBs, 15% felt directly affected, while 50% feared indirect effects such as price increases from suppliers.
Potential EU counter-tariffs could impact SMBs even more. Nearly a third (29%) of companies anticipate increased purchasing prices, while 46% fear impacts on suppliers. The data for DZ Bank's survey was gathered in March, before the US President Trump announced his large-scale tariff package. However, plans for 25% tariffs on car and steel imports were already known. In early April, Trump threatened the EU with additional 20% duties, which are currently suspended. The EU has paused planned counter-tariffs for now, hoping for a negotiated solution.
- Small and Medium-sized Businesses
- Germany
- USA
- Construction site
- Digitalization
- Trade dispute
- Germany
- Federal government
- Energy costs
- Bureaucracy
- Frankfurt am Main
- Forsa
- Commerzbank
- Europe
- Italy
- Vietnam
Insights from Enrichment:
- Impact on Construction Sector: Uncertainty from tariffs, supply chain disruptions, contractual risks, as well as increased material and equipment costs pose threats to SMBs in the construction sector.
- Strategies for SMBs: To navigate these challenges, SMBs should consider diversifying their supply chains, being agile and adaptable, and embracing innovation and strategic growth.
- German Economy Impact: The ongoing trade dispute could lead to economic contraction, reduced demand for construction services, and reciprocal measures from the EU, further complicating trade relations.
- Small and Medium-sized Businesses (SMBs) in the construction sector within Germany are grappling with the threats posed by trade disputes, supply chain disruptions, contractual risks, and increased material and equipment costs.
- As a potential strategy to navigate these challenges, SMBs might consider diversifying their supply chains, being agile and adaptable, and embracing innovation and strategic growth.
