Monday, August 9th, 2021
Sections of the middle class are worried
Companies fear permanent corona kink
The German middle class is considered to be the backbone of the domestic economy. Many companies are now afraid that the demand for their products will continue to decline even after the pandemic has ended. According to experts, the corona crisis is accelerating changes in the medium-sized economy.
According to KfW, the changed consumer behavior in the Corona crisis will accelerate the change in the medium-sized economy in Germany. According to a survey by the state development bank, around 650,000 small and medium-sized companies (17 percent) fear that demand for their products or services will remain permanently below the pre-crisis level. Retail companies in particular (20 percent) are worried, but also almost every fifth medium-sized industrial company (19 percent).
Companies that are particularly hard hit by the restrictions to combat the pandemic are said to be more pessimistic about the future. More than half of them expect a permanent decline in demand. “The corona crisis could go down in history as a catalyst for changes in SMEs,” says KfW chief economist Fritzi Köhler-Geib. “For some SMEs, the pandemic-induced changes in consumer behavior will lead to a lasting decline in demand.”
However, expectations are not all negative. Around every third medium-sized company (31 percent) expects that the changed consumer behavior will also influence demand after the crisis. However, 14 percent are confident that their offers will be more in demand after the pandemic than before. Four out of ten small and medium-sized companies (40 percent) assume that demand will return to pre-crisis levels. Another 29 percent see no effects so far. KfW counts companies that do not have an annual turnover of more than 500 million euros as medium-sized companies.
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