With this scientific study on the expectations of firms in Germany, the Research Centre of the Deutsche Bundesbank wants to gain an understanding of the current situation.

The coronavirus pandemic hit small enterprises especially hard. In spring, these enterprises saw sales fall more than proportionally. By contrast, the sharpest reductions in employment were experienced by larger enterprises. More than 60% of firms recorded decreases in sales during May and June, and two-thirds of these decreases were significant. Declines of similar magnitudes were also recorded for employment and short-term liquidity.

Firms’ expectations were bleak this summer: out of the enterprises surveyed, half expected a decline in sales, more than one-third expected a fall in employment, and one-quarter expected a decline in sales prices in the second half of2020. Particularly pessimistic was the accommodation and food services sector, as were the producer goods, wholesale trade and transport sectors.

Enterprises considered the lack of customer demand, the high level of regulation or government rules, and closures or work restrictions due to the coronavirus pandemic to be among the biggest problems for the second half of 2020. This summer, more than one-third of respondents expected these issues to become pressing problems in the second half of 2020. Lack of customer demand was seen as a problem in the producer goods and transport sectors in particular, whereas the construction and the food and beverages sectors reported fewer concerns in this regard.

The percentage of firms that started credit negotiations in the spring of 2020 because of the coronavirus crisis was twice as large as the percentage of firms that started credit negotiations regardless of the crisis. Larger enterprises were more likely to begin negotiations regardless of the crisis, while there was a higher incidence of negotiations initiated as a result of the crisis across all sectors and firm sizes. Only one-third of the enterprises that requested credit also received it in the desired amount and at the desired conditions. An additional one-third ended their negotiations without approval.