The latest data indicates that wages are the only area currently showing growth within the German small and medium-sized enterprise (SME) sector. According to the Datev SME Index published by FAZ (Tuesday edition), wages across various sectors in SMEs rose by 6.5 percent compared to the previous month of the prior year. In contrast, company revenue remained stagnant, showing only a minor increase of 0.2 percent year-over-year. Furthermore, employment in the SME sector slightly declined by 0.2 percent.
These trends continue the patterns observed in previous years: rising wages, flat sales, and employment that has been shrinking slightly almost month by month since 2023. Robert Mayr, Managing Director of the Datev Cooperative, noted this trend, stating that “this is not a recovery, but stagnation under pressure” pointing specifically to the combination of rising wages and sluggish revenue growth.
Wages saw particularly strong increases in the construction industry in March, rising by 7.9 percent year-over-year, even as employment in that sector retreated by 1.8 percent. In the manufacturing sector, employment fell by 1.4 percent, while average wage growth reached 6.4 percent. Meanwhile, the hospitality industry experienced a 1.1 percent decrease in employment.
At the beginning of the year, Datev Chief Economist Timm Bönke suggested that the sales index pointed to some revitalization within the SME sector, citing the logistics industry as a key indicator of economic health. He suggested that government demand for infrastructure and defense goods was evidently boosting suppliers in the SME sector. However, Bönke later noted that “this boost in logistics within the SME sector broke off in March”.