The revenue of German small and medium-sized enterprises (SMEs) decreased by 1.4 percent in May compared to the previous year, according to the Datev SME Index published by the Frankfurter Allgemeine Zeitung. This decline halts the minor upward trend that had been developing since the beginning of the year, bringing the index to a level similar to that seen at the start of 2024 in March.
Robert Mayr, the Chairman of the Board of Datev Cooperative, noted, “The revenue weakness in SMEs, which has been ongoing for three years now, continues.” He suggested that many sectors are still facing significant structural and cyclical headwinds.
Specific industry declines were notable: retail revenue dropped by 6.5 percent year-over-year, the construction industry saw a 5.8 percent reduction, and the manufacturing sector experienced a 4.2 percent fall. The FAZ reported that the situation in these crucial economic areas has deteriorated significantly over the last three months. The catering and hospitality sector was the only sector that registered a gain in May, rising by 2 percent. This positive trend may be partially attributed to May having one more public holiday than the previous year, which tends to strain retail while supporting hospitality.
The sustained weakness within small and medium-sized businesses is contributing to employment development that has essentially stagnated since 2023, showing a slight downward trend. In May, employment once again fell by 0.1 percent compared to the previous year, with the manufacturing sector, catering, and construction industry being the most heavily affected.
