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[BUSINESS] · Germany · 7 sources

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Germany's SMEs delay investments amid economic uncertainty

An analysis by the development bank KfW reveals that small and medium-sized enterprises (SMEs) in Germany are struggling to maintain investment momentum. In 2025, only 40 percent of the country's 3.9 million SMEs implemented planned investment projects.

According to the KfW SME Panel, 33 percent of companies reported in September that they have postponed or reduced the scale of investments originally planned for 2026, a record high. KfW Chief Economist Dirk Schumacher noted that while financial resources for digitalization, new equipment, and energy efficiency are often available, many firms are simply delaying projects, which poses a risk to Germany's economic standing.

In 2025, SMEs invested a nominal total of approximately 218 billion euros in new plants and buildings, which is 3 billion euros less than the previous year. When adjusted for inflation, real investment volume has declined for the third consecutive year. From 2019 to 2025, price- and calendar-adjusted corporate investments in Germany fell by 8.3 percent. Key obstacles cited by businesses include high costs for energy, materials, and wages, alongside bureaucracy and economic uncertainty.

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Dirk Schumacher · Germany · KfW

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