Published by Global Banking & Finance Review®
Posted on October 7, 2025
2 min readLast updated: January 21, 2026
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German small business morale is positive for the first time since 2022, with optimism rising despite high energy prices and labor costs.
BERLIN (Reuters) -Sentiment among small- and medium-sized German businesses nudged into positive territory for the first time since 2022, as slightly more firms showed optimism, a survey found on Tuesday.
An index measuring the morale of roughly 1,200 "Mittelstand" companies that form the backbone of the German economy rose to 0.1 points this year from -4.8 points last year, found the survey by credit agency Creditreform.
A narrow majority of surveyed companies were more optimistic, and the willingness to invest also increased slightly, though both were still below previous levels.
The economy will begin recovering next year, driven by record state spending, but it remains uncertain whether that money can get the economic engine started again, said Patrik-Ludwig Hantzsch, head of Creditreform Economic Research.
"Relying solely on fiscal measures by the federal government is not enough," he said.
The majority of companies rated their current situation as negative for the third year in a row as weak industrial production, subdued consumer sentiment, high energy prices and rising labour costs place them under severe pressure.
The proportion of companies with less than 10% equity rose to 30.8%, the highest level since 2017, due to the weak earnings situation in recent years, forcing them to dip into reserves.
"If the equity gap continues to grow, the risk of insolvency will also continue to rise," warned Hantzsch.
(Reporting by Natascha Koch, Writing by Miranda Murray)
Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country's borders in a specific time period.
Business investment involves the allocation of resources, usually capital, to projects or assets with the expectation of generating profit.
A financial crisis is a situation where the value of financial institutions or assets drops significantly, leading to widespread economic instability.
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