17.11.2022 | reading time

MARKET AND MEDIUM-SIZED BUSINESSES - We can do it! 6 Reasons Why It's Better Than It Looks

Note: This text is a translation from the original language, German.

It seems that the Germans are in a mood slump that makes it impossible to perceive signs of hope. Like a mentally ill patient suffering from depression, we simply ignore good news. However, they are now unmistakable. Crisis and recession are there, but they are coming to an end. There are six solid indicators for this.

First: Gas prices are dropping again. The main reason is full gas storage in Europe. Filling levels above 90 percent are the rule, Belgium has reached 100 percent, and no more gas is going in. With falling energy prices, inflation is decreasing – secondly. The central banks' measures are contributing to the reversal. Third: Stock markets have recently shifted from gloomy to friendly. Expectations are being traded on them, and they seem to be in the green zone. As a mood lifter, fourthly, is that, based on everything we know, the further course of the coronavirus situation will have rather manageable consequences. In Europe, doctors and governments have shifted to dealing with the infection like the annual flu waves in winter. Karl Lauterbach is probably the last one who still expects lockdowns. It is also clear that – fifthly – supply chains are relaxing. The problem still exists, but medium-sized businesses can handle it better: one has found new suppliers, and another has stocked up more. And finally, sixthly: the job market remains stable. The Federal Employment Agency is very cautious, but it does not expect a crisis because there is no wave of insolvencies in sight.

As a result of all these developments, the Munich-based Ifo Institute published a survey this week, which seems to have been somewhat overshadowed because it clearly does not fit the general mood of depression: Only 7.5 percent of companies in Germany see their existence threatened, which is significantly less than during the height of the Corona pandemic. "In view of the strong economic cooling, companies are showing great resilience," says the head of the survey. Now we just have to believe him.