Survey on the expectations of firms

Through its academic survey, the Research Centre of the Deutsche Bundesbank is obtaining a picture of the current situation among firms in Germany and gaining greater insight into their expectations for the coming months. Over time, the survey also provides crucial information on changes within the corporate sector.

Firms’ Assessments

Looking at the past 12 months, there was a small increase in the share of firms reporting decreased access to intermediate inputs in the first quarter of 2024 (23%) than in the previous quarter (22%). Slightly more firms reported a reduction in their inventories than in the previous quarter (23% compared with 21%), while slightly fewer firms (22 %) perceived an increase in this respect (Q4 2023: 23%). At 22%, somewhat fewer firms reported a deterioration in their access to funding sources in the first quarter of 2024 than in the previous quarter (23%). At the same time, a slightly smaller proportion of firms (32%) registered a decline in short-term liquidity (Q4 2023: 33%). The share of firms reporting an increase in their need for credit financing edged up from 26% in the previous quarter to 27% at present.

Firms’ Assessments
Firms’ Expectations

Somewhat fewer firms expected greater access to intermediate inputs over the next 12 months in the first quarter of 2024 (14%) than in the previous quarter (16%). At the same time, a slightly greater share of firms (18%) anticipated their access to intermediate inputs to deteriorate than in the previous quarter (17%). The number of firms expecting reductions in inventories over the next 12 months remained unchanged at 24%. Expectations relating to short-term liquidity deteriorated again slightly. An increased share of firms (31%; Q4 2023: 30%) expected a decline in this regard, whilst only an unchanged 16% expected their liquidity situation to improve. An unchanged 30% of firms expected their need for credit financing to increase over the next 12 months, while a slightly higher proportion of firms (17%) anticipated a decline in this regard (Q4 2023: 15%). At 70%, the vast majority of firms continued to expect their access to financing sources to remain constant//stable over the next 12 months (Q4 2023: 68%).

Firms’ Expectations
Challenges Faced by Firms

High levels of regulation and government rules overtook shortages of labour as the biggest short-term challenge in the first quarter of 2024: 67% of firms considered regulation to be a pressing problem over the next six months, while 62% reported the same for the labour market situation. At 54%, the share of firms that saw high production and labour costs as problematic for the next six months also remained at a high level. By contrast, the share of firms for which access to intermediate inputs was a pressing problem for the next six months fell again, reaching just 12% in March 2024. In the first quarter of 2024, firms were also surveyed for the first time regarding their assessment of energy prices. The proportion of firms that considered energy prices to be fairly unproblematic in the short term increased slightly over the quarter to 25%, while around half of firms – with this share falling slightly to 50% during the quarter – saw energy prices as a pressing problem over the next six months.

Challenges Faced by Firms
Firms’ Demand for Credit

Firms’ demand for credit remained stable in the fourth quarter of 2023 – a slightly smaller share of firms (14%) reported having conducted credit negotiations in the previous quarter. Of those firms that conducted credit negotiations, 29% reported that they had obtained credit both for the desired amount and at the desired conditions, an increase of 3%. The share of firms that obtained credit for the desired amount but at less favourable conditions stagnated at 30%. Credit negotiations that concluded without a deal were reported by 19% of firms (Q4 2023: 20%).

Firms’ Demand for Credit
Inflation Expectations

After a slight increase in January, the expectations of firms in Germany regarding the inflation rate over the next 12 months declined again over the remainder of the first quarter of 2024. At 3.4% on average in March 2024, they reached their lowest level since August 2021. Median inflation expectations also fell, standing at 3.0% in March 2024.

Inflation Expectations
Further survey results

In addition to the regularly recurring questions on enterprise metrics, expectations and access to loans, the Bundesbank frequently asks enterprises questions on various current issues. A selection of the results is presented here.

Further survey results