Survey of company: SME releases from Corona-shock – the risk of Insolvency remains high

medium-sized German companies are increasingly relying on the shock of the Corona-crisis. "The small and medium-sized companies with a solid recovery rate for

Survey of company: SME releases from Corona-shock – the risk of Insolvency remains high

medium-sized German companies are increasingly relying on the shock of the Corona-crisis. "The small and medium-sized companies with a solid recovery rate for the summer quarter," said the banking group KfW on Thursday to stand your agent barometer with the Munich-based Ifo Institute.

The business climate rose in July for the third Time in a row. Also in the case of large companies, the mood is light. "Their current business situation assessment of this enterprise but despite the current strong growth is still twice as bad as the SMEs." Especially the trade benefit from the upturn in the economy. "In particular, in the case of small and medium-sized retailers, the temporary VAT reduction seems to have a significant effect." The business situation is climbed back to the level of the Corona-crisis.

If the VAT rate in 2021 will again be increased from 16 percent to 19 percent, would have to count on the company with a counter-movement. "Problem child of the German economy, the industry remains", said the KfW-professionals. The small and medium-sized companies in the manufacturing industry assess their business, "significantly worse than the medium-sized companies in all other sectors of the economy". Even more pessimistic is the large industrial looked at companies on their business situation. But these companies bet on better prospects and more export business.

increasing number of large insolvencies

"After the crash to the Ground in April, a decent reboot is succeeded the small and medium-sized enterprises", said KfW chief economist Fritzi Köhler-Geib. The more positive mood support not only to better prospects, but since June, also to a better business location. "After the historic slump in the first half of the course for a high rate of growth in the summer are made quarterly." A risk remained, however, rising new infections in Germany and worldwide.

But also in terms of corporate insolvencies, there are still significant risks. It dasInstituts for economic research in Halle (IWH) has pointed out in a study. Accordingly, the country of Germany, significantly more Employees of company insolvencies affected and,although the number of bankruptcies continued to fall.

As published on Thursday the insolvency trend the Halle, Economists were affected in July, three Times as many of the reported payment difficulties than the average for the first three months of this year. According to the IWH this is due to the increasing number of large insolvencies. At the same time, the number of registered bankruptcies fell compared to June of 3 percent and compared to the previous month by as much as 11 percent. These developments are according to the study, however, of little significance.

Updated Date: 06 August 2020, 11:20

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