Almost 50 per cent of small-to-medium enterprises (SMEs) in Germany are considering ending their operations there, research by an industry body has found.
The survey of around 1,200 businesses by the German Association for Small and Medium-sized Businesses (BVMW) found that firms are struggling with bureaucracy and overregulation, with some also concerned about a shortage of skilled workers.
According to the data gathered by BVMW, 26 per cent of surveyed businesses are actively considering closing their doors for good. A further 22 per cent are looking at relocating their operations to another country.
Markus Jerger, the chairman of the BVMW, warned that the results were more than a mere “warning signal” for German authorities, adding that officials could no longer afford to be “indifferent” regarding the problems facing SMEs there.
Some of the concerns SMEs apparently expressed also seem to be in line with those voiced by larger businesses in Germany, with numerous experts forecasting that the country could face permanent “de-industrialisation” should relevant authorities not provide help to struggling companies.
Germany’s heavy-industry sector has mostly been concerned about the price of energy, especially gas, in the country, with many organisations looking to move abroad to cut costs.
The head of the German Industry Federation (BDI) Siegfried Russwurm, told CNBC in June that many businesses operating in the country have “very operational plans to relocate” due to a “wide variety” of problems they are facing.
Inn addition, over-taxation seems to be among the biggest issues facing SMEs, with one in four organisations surveyed by the BVMW citing it as a major concern.
Both sectors seem to agree that Germany’s often-cited reliance on rules and regulations is starting to become overly burdensome, with both the BDI and BVMW pointing to a surfeit of red tape as causing serious problems for their members.