Economic situation of SMEs in Germany remains weaker than in the euro area
After both turnover and profits among small and medium-sized enterprises (SMEs) in Germany had shown a slight improvement towards the end of 2025, the economic situation in both Germany and the euro area deteriorated again in the first quarter of 2026, not least as a result of the war in the Middle East. Overall, the situation facing SMEs in Germany remains weaker than in the euro area. Difference between the share of SMEs reporting increases and decreases in turnover, profit and investment over the past three months.
The researchers at IfM Bonn use the Europewide business survey Survey on the Access to Finance of Enterprises (SAFE), which has been conducted on behalf of the European Commission and the European Central Bank since 2009, to provide regular reports on the current economic situation and key challenges facing small and medium-sized enterprises in Germany and selected EU countries.
Rising costs are becoming an increasing challenge
Although labour shortages remain the most significant challenge for small and medium-sized enterprises in Germany and the euro area, the issue of production and labour costs is increasingly coming to the forefront. Access to finance continues not to be a challenge for the vast majority of SMEs.
In the euro area as well, production and labour costs have regained importance in recent months. However, as in Germany, labour shortages remain the primary challenge.
