Datev index: The upswing does not arrive properly in SMEs

The economic upswing, which the Federal Government predicts for this year, arrives in medium-sized companies only to a limited extent. Since the high in March, turnover has stagnated in the entire middle class. This is shown by the Datev SME index, which the F.A.Z. publishes exclusively. Thus, the turnover of medium-sized companies – adjusted for seasonal and calendar effects – was one percent higher in September than a year ago. Compared to the previous month, however, the sales index declined by one percent. Since March, the upward movement that had previously emerged in the trend has come to an end. Because wage costs continue to rise at the same time, the CEO of Datev eG, Robert Mayr, sees only a weak signal for improvement. Economic development does not reach all parts of the middle class equally, said Mayr. In important sectors such as manufacturing, construction and trade, medium-sized sales have fallen in trend since the beginning of 2023. Since then, the decline in sales has been around 11 percent in the manufacturing sector, around 16 percent in the construction sector and around nine percent in the retail sector. In the hospitality sector, medium-sized sales have been trending since April and have recently declined at an accelerated pace. Other sectors have developed positively in this long-term comparison, especially health and social services as well as education and teaching. There is only one clear upward trend in recent months: traffic and warehousing. This can be interpreted as a signal of economic improvement in the entire economy, which requires more transport performance. Higher energy prices may also play into this. Large differences between medium-sized companies are evident in the size definition. The smallest companies with up to ten employees have been declining sales for months, while small and medium-sized companies have increased their sales. The strong wage growth affects medium-sized companies of all sizes more or less equally. Datev shows a rise of 5.5 percent for wage developments in the entire SME sector in September. Employment fell again and was 0.2 percent lower than a year ago. The Datev Cooperative, an information service provider for the tax consulting professions, uses the sales tax advance notifications of more than one million companies and the payroll of more than eight million employees in Germany. The data is anonymized and aggregated in the index. The SME index is available earlier than official statistics and provides a good insight into the economic situation of medium-sized companies.