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KfW Finds Record SME Employment as Investment Stalls and Financial Strain Rises

KfW urges political action to revive SME investment under pressure from high costs, bureaucracy, and trade-policy uncertainty.

Overview

  • Germany’s Mittelstand employed about 33 million people in 2024, yet net job creation slowed to roughly 207,000 from nearly half a million the year before.
  • Only 39% of firms — about 1.51 million — carried out investment projects in 2024, a rate near an all‑time low.
  • SMEs invested around €221 billion nominally, up about €2 billion year over year, but the real (inflation‑adjusted) investment volume declined again.
  • Administrative requirements consumed roughly 7% of working time, equivalent to about 32 hours per employee each month.
  • Profitability averaged about €0.07 per euro of revenue as the share of firms unable to service interest rose to 3.6% from 2.6%, prompting KfW’s chief economist to call for policy relief.