{"id":52781,"date":"2023-01-11T09:02:19","date_gmt":"2023-01-11T08:02:19","guid":{"rendered":"https:\/\/pharma-trend.com\/en\/german-mittelstand-leaders-brace-for-recession-while-finding-ways-to-adapt-to-ongoing-business-challenges-third-annual-j-p-morgan-survey-finds\/"},"modified":"2023-01-11T09:02:19","modified_gmt":"2023-01-11T08:02:19","slug":"german-mittelstand-leaders-brace-for-recession-while-finding-ways-to-adapt-to-ongoing-business-challenges-third-annual-j-p-morgan-survey-finds","status":"publish","type":"post","link":"https:\/\/pharma-trend.com\/en\/german-mittelstand-leaders-brace-for-recession-while-finding-ways-to-adapt-to-ongoing-business-challenges-third-annual-j-p-morgan-survey-finds\/","title":{"rendered":"German Mittelstand Leaders Brace for Recession While Finding Ways to Adapt to Ongoing Business Challenges, Third Annual J.P. Morgan Survey Finds"},"content":{"rendered":"
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\nMittelstand companies demonstrate resilience as stubbornly high inflation, energy prices and strained supply chains weigh on the overall business outlook<\/i>\n<\/p>\n

FRANKFURT, Germany–(BUSINESS WIRE)–Optimism is falling among German Mittelstand leaders, with nearly six in ten (59%) expecting a recession in 2023, and more are feeling pessimistic about the global (24%) and national (28%) economy compared to last year, according to J.P. Morgan\u2019s third annual Germany Business Leaders Outlook<\/a> survey released today.\n<\/p>\n

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\n\u201cAs uncertainties persist into the year ahead, it does not come as a surprise that business leaders have a more subdued outlook on the economy,\u201d said Bernhard Brinker, Head of Commercial Banking, DACH Region, J.P. Morgan. \u201cAt the same time, however, we recognize that Mittelstand companies are resilient and have taken thoughtful precautions to navigate through this uncertain environment.\u201d\n<\/p>\n

\nIn a survey of more than 250 senior executives of German Mittelstand companies, many leaders still expect their business to grow in revenue (69%) and profits (59%), though these figures are down 10% and 14% respectively from 2022. More than half (56%) expect capital expenditures to increase, down 10% from 2022, with nearly two out of three expecting capital needs (64%) to also increase.\n<\/p>\n

\n\u201cWhile companies are bracing themselves for a harsher business climate, we see that the German Mittelstand community is tackling the economic challenges proactively and continues to have conviction about the strength and success of their businesses,\u201d said Stefan Povaly, Head of Germany, Senior Country Officer, J.P. Morgan.\n<\/p>\n

\nAdapting and Solving for Persistent Business Challenges
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<\/b>Business challenges like supply chain issues were evident throughout 2022, with nearly six in ten (57%) leaders citing that supply chain pressures have gotten worse over the past 12 months. To account for this, those experiencing supply chain pressures are allocating more funds to cover increased costs related to moving products (45%), focusing on strategic stockpiling (40%) and are near-shoring by shifting manufacturing or distribution closer to their key markets (39%).\n<\/p>\n

\nWhile those experiencing higher costs of doing business cite increased cost of energy (77%) as the biggest driver, nearly a quarter (23%) of Mittelstand leaders see energy prices as the number one external threat or risk to their business.\n<\/p>\n

\nNotably, nearly seven in ten (69%) companies still face inflation challenges, and more than half (53%) have raised prices to account for inflation. Of those who have raised prices, the largest share (36%) is passing along 26%-50% of their increased costs on to their consumers. This trend is likely to stay, as a vast majority (83%) of those passing along costs plan to continue to do so.\n<\/p>\n

\nCreatively Attracting and Retaining Top Talent
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<\/b>In the midst of continued economic headwinds, 39% of Mittelstand leaders are planning to add headcount and 38% plan to maintain their current headcount in the year ahead.\n<\/p>\n

\nIn light of the current labor environment, Mittelstand leaders planning to add or maintain headcount are taking a variety of measures to attract and retain talent through:\n<\/p>\n