The economic recovery forecast by KfW for the second quarter of 2013 is
becoming increasingly apparent.
This is illustrated by the results of
the KfW-ifo SME Barometer for December 2012. As KfW announced, at the end of last year, the business expectations of small and medium-sized enterprises jumped by twice the average monthly variation, or 4.9 points, to -1.2 balance points. After this third successive increase, the 3 1/2-year low of September has now been overcome by almost ten points. At the same time, businesses rate the current business situation just as positively as in November (17.3 balance points). Given that economic output probably declined slightly in the last quarter of 2012, this is a remarkably good result. Both components combined show that the business climate improved in December by 2.5 points to reach 8.1 balance points, the best result of the last five months.
Large enterprises expect a turn for the better in 2013 as well, illustrated by the strong upward revision of their business expectations (+6.9 points to -6.5 balance points). Unlike the SME sector, however, they rate the current business situation slightly less positive than in the previous month (-0.7 points to 5.9 balance points). As a result, their business climate remained below the normal cyclical level in December as well, even if now by a slim margin only (rising by 3.3 points to -0.1 balance points).
The manufacturing industry contributed significantly to brightening the mood. In both company size categories the business climate is improving noticeably (SMEs: +3.7 points to 3.3 balance points; large enterprises: +3.8 points to -6.0 balance points). In view of the great importance of the manufacturing industry for the German economy, this development is particularly positive. The less negative mood among large enterprises, which are heavily geared to exports and have recently taken some heavy blows, also suggests that global demand is also starting to pick up again. However, for this to be regarded as a genuine turnaround, the recovery will have to be confirmed in the months ahead.
"German companies – SMEs as well as large enterprises – are already looking beyond the current phase of weakness and expecting a revival in the spring. This reinforces our view of the economy", commented Dr Jörg Zeuner, Chief Economist of KfW, summarising the core message of the current KfW-ifo SME Barometer. It can be assumed that gross domestic product in real terms contracted somewhat in the final quarter of 2012 and will expand only moderately above stagnation in the first quarter 2013 that has just begun. Provided the global economy continues to recover and Europe gains increasingly better control of the crisis, from the second quarter we will be seeing much stronger quarterly growth rates again. Zeuner: "Because of the weak winter half of 2012/13 and enterprises' still very limited investment propensity, for 2013 overall we will nevertheless see growth of only less than one per cent. It is only in 2014 that a significant increase may be possible, much of which will be due to the economic impetus that will probably build up in the course of this year."