Was that it with the corona crisis? Economists and companies rate the situation in Germany surprisingly positively again. The middle class benefits from the fact that they have previously operated conservatively.
Dhe German economy is back on growth course after the corona-related record slump in spring, according to the Federal Statistical Office. She was able to “recover a little” in the summer months of July and August, said Albert Braakmann, head of the department for national accounts and prices, on Tuesday. Leading indicators such as industrial orders, truck mileage and the Ifo business climate index “suggest a further recovery,” he said.
The economic expectations of German financial experts also surprisingly brightened in September. As the Mannheim Center for European Economic Research (ZEW) announced on Tuesday, the indicator it collected rose by 5.9 points to 77.4 points. Instead, analysts had previously expected a decline to 69.5 points on average. The assessment of the current economic situation has surprisingly improved significantly.
“This shows that the experts continue to expect a noticeable recovery in the German economy,” commented ZEW President Achim Wambach. “The stalled Brexit negotiations and the rising number of corona infections could not slow down the positive mood.”
Capital buffers save the middle class
The gross domestic product slumped by 9.7 percent in the second quarter as a result of the corona restrictions. Economists expect noticeable growth again in the second half of the year. Nevertheless, according to estimates by the federal government, economic output is likely to shrink by 5.8 percent in 2020 as a whole – that would be stronger than ever in the post-war period.
For many German medium-sized companies, good capital buffers have proven to be an effective lifebuoy during the crisis. According to a study by the German Savings Banks and Giro Association (DSGV), these enable them to largely cushion the onset of the corona crisis. With an average equity ratio of 39 percent, the companies are sufficiently capitalized to put up with losses, said Sparkasse President Helmut Schleweis on Tuesday.
The association expects an average decline in sales of 5.7 percent for all industries this year, Schleweis said. The middle class has lost around 44 percent of its profits. Nevertheless, the companies remained profitable on average and could generate a return on sales of 3.5 percent in 2020, according to the study.
The corona pandemic hit medium-sized businesses with full force. While the hospitality, tourism and auto industries or the trade fair and event business would be confronted with in some cases considerable losses in sales, construction, health and social services remained on a growth path this year, Schleweis said: “In the past good years, many companies have made exemplary profits were mostly left in the company. ”The companies now benefit from this. “The high financial stability enables many companies to compensate for temporary losses on their own with their own equity.”
Banks are also in a solid position
The Sparkasse President therefore does not expect a large wave of company bankruptcies. Around three quarters of all of the savings banks’ financing experts surveyed assume that less than two percent of their medium-sized corporate customers will have to file for bankruptcy in the next six months, “regardless of whether they are obliged to file for bankruptcy.” This is an encouraging result, said Schleweis – “even if it makes it clear that not all companies will survive the crisis.” For its “S-Mittelstands-Fitnessindex”, the DSGV evaluates around 300,000 balance sheets from corporate customers and analyzes from their savings banks every year. Consultants.
There are also optimistic voices from the German banks. The financial industry will withstand the pressure of the Corona crisis, said its association president Hans-Walter Peters. “If there is no further lockdown and we are spared a massive second wave of contagion, most banks should get through the crisis well,” he was quoted on Tuesday by the “Handelsblatt”. The institutes are very robustly positioned with “significantly higher capital ratios than a decade ago”. That is why he considers the great majority of the institutes to be well equipped.