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German business leaders remain optimistic about growth and economy despite pandemic, inaugural JP Morgan survey finds

By on May 27, 2021 0

FRANKFURT, Germany – (BUSINESS WIRE) – Undeterred by the supply chain challenges posed by COVID-19, German companies are doubling down on globalization, embracing technology as a way to adapt and planning medium-term ownership transitions, according to the inauguration of JP Morgan Perspectives of business leaders in Germany survey released today.

JP Morgan surveyed 238 senior executives of German mid-cap companies and found that nearly 60% believe the global and German economies are heading in a positive direction over the next year. This optimism is fueled by three quarters of respondents stating that they expect increased revenue / sales and profits in the coming year.

While many executive leaders are optimistic about the future, they are faced with the realities of an unpredictable operating environment. According to the survey, the main challenges are:

  • COVID-19[female[feminine: Many of the challenges that executives face are still directly related to COVID-19, as 37% of companies report changing consumption habits due to COVID-19 as their main challenge.
  • Supply chain: After the envy of new customers, another challenge cited by leaders around their international activity is to have access to suppliers and materials. As contributing factors, 62% of executives say the pandemic has increased supply chain problems and 28% say Brexit has made supply chains worse as well.
  • Internet reliability: More than a quarter (26%) of executives surveyed cited the need for technology upgrades to stay relevant as one of their top three business challenges. The lack of high-speed internet is a long-standing problem that has only become more evident in the past year – nearly half (46%) of executives would like the German government to focus on l ‘improved access over the next year.

“Companies operate in an ever-changing world, but the past year has required them to evolve and invest in their operating models in new and challenging ways – from adopting technology for remote workers to managing business. their supply chains, ”said Bernhard Brinker, Head of Commercial Banking Services. , JP Morgan Germany. “However, companies are optimistic that the changes they have made over the past year will help them to be more and more effective in the year and to grow nationally and internationally. ”

In addition to planning for operational challenges, German companies have responded to the economic realities of 2020 by changing their operating models and adapting their business strategies to maintain a certain level of success in the new environment. As they begin to look to a post-pandemic world, German executives are now looking to advance their businesses in new ways, including:

  • Global expansion continues: In today’s globalized economy, 85% of German companies report that 25% or more of their sales come from outside the European Union. Despite their already strong international footprint, two-thirds (65%) of German companies plan to further increase the number of countries in which they will operate over the next five years.
  • Adopt technology: 57% of respondents have already increased their use of online banking tools for electronic payments, changed their business model to be more online and transferred employees to work from home. Of those who have yet to make these changes, 24% plan to take these steps in the next six months.
  • Preparation for business transitions: Responses from executives also indicate that an increase in mergers and acquisitions could occur over the next five years, with almost two-thirds (63%) saying they are considering a full or partial transfer of ownership. The most common route for German business leaders is to pass their business to a family member, with 25% indicating that they plan to transfer ownership to the family by inheritance, with 21% indicating that ‘they plan to transfer the property to the family as a gift and 21% provide for a transfer of property to the family. transfer of ownership to the family through a sale. Almost a third (30%) of respondents plan to transfer their business away from their family – 15% to the current management of the company and 15% to a third.

“Mittelstand companies are the engine of the German economy. We look forward to continuing to serve this vital part of our customer base, as many seek to expand beyond their traditional border and realize their international ambitions, and as we expand our footprint in this important segment of the world. market, ”said Stefan Povaly, Head of JP Morgan Germany, Senior Country Agent.

For more information on the 2021 outlook for JP Morgan CEOs in Germany, visit www.jpmorgan.com/businessleadersoutlook-germany.

Survey methodology

JP Morgan’s Business Leaders Outlook survey was conducted online from March 10-29, 2021. A total of 238 senior executives (CEOs, CFOs, CFOs and owners) of German Mittelstand companies, with a majority of annual revenue ranging from $ 100 million to $ 2 billion participated in the survey. The results are consistent with the statistical parameters of validity and the error rate is +/- 6.4% at a confidence rate of 95%.

About JPMorgan Chase

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services company with $ 3.7 trillion in assets and operations worldwide. The firm is a leader in investment banking, consumer and small business financial services, commercial banking, financial transaction processing and asset management. Part of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of clients in the United States and many of the world’s largest corporate, institutional and government clients under its JP Morgan and Chase brands. Information on JPMorgan Chase & Co. can be found at www.jpmorganchase.com.