A survey by the German Savings Banks Association (DSGV) gives hope: 93 percent of SMEs made a profit in 2020. But what does the future hold? The Corona pandemic hit many medium-sized companies in Germany, but the survey results from the German Savings Banks and Giro Association (DSGV) give hope. Every year, it evaluates the balance sheets of corporate customers with annual sales of up to 250 million euros. In some sectors, for example, around 93 percent of companies still made a profit in 2020.
Effects of the Corona pandemic
Last year, the sales of medium-sized companies fell by a total of around three percent and profits fell by a good five percent. For 2021, on the other hand, sales are expected to increase by as much as five percent.
In 2020, just under seven percent of companies suffered losses on the balance sheet, but reserves and flexibility were mostly able to compensate for this. In only 0.7 percent of companies did losses exceed equity. This shows that medium-sized companies have come through the difficult period of the Corona pandemic comparatively well.
KFW survey shows pessimism among SMEs
However, according to KFW (Kreditanstalt für Wiederaufbau), many SMEs fear that consumer behavior has changed permanently during the Corona pandemic and that demand for certain products will remain permanently below pre-crisis levels. This was revealed by a survey conducted in August 2021. Thus, according to the pandemic, it would act as a “catalyst” for lasting change. Only four out of ten companies expect demand to return to normal, according to the survey.
Outlook for the future
In 2021, however, strong growth is expected in all sectors, according to the DSGV, and only some sectors such as the hospitality industry will need more time to recover financially. Here, for example, an estimated increase in sales of around 14 percent is suspected, which will only make up for a small part of the high losses from the Corona year 2020.