In the second half of December 2020, many of the participating companies still reported that government aids have helped them to keep their profits steady. This was in line with the data the ongoing GBP survey had collected by then. However, this trend was reversed in the first half of January. The result: At the end of January, companies in Germany reported that their turnovers and profits have decreased by more than 20 percent as compared to the previous year. This is a negative record since the GDP began collecting the data last summer.
“We were surprised by how drastically the numbers declined in January”, says Professor Jannis Bischof from the University of Mannheim about the results of the latest survey. Bischof holds the chair of Business Administration and Accounting and is project manager of the German Business Panel. “We could not observe this development at the end of December, although we were already in the middle of the lockdown”, Bischof states.
In addition, the latest survey shows that about half of the participating companies expect this to continue for the entire year and that their turnover will not pick up before the first quarter of 2022. 22 percent of these companies are of the opinion that their turnovers will never reach the level they had before the coronavirus crisis hit. The participants expect that almost every fourth company will not survive the crisis.
Companies are increasingly dissatisfied
Another result illustrates the companies’ pessimistic outlook on the future: Decreasing turnovers and profits lead to an increasing dissatisfaction among German companies. In this case as well, the situation has changed within a few weeks: At the beginning of December, less than a third of the companies were dissatisfied with the government measures. By mid-January, this share has risen to almost 50 percent. During this time, the share of companies satisfied with the measures decreased and by mid-January, it fell below the 20 percent mark.
The GBP researchers are convinced that this development is not only due to the closure of shops all over Germany, although this might seem to be a reasonable explanation. The unexpected hurdles companies need to overcome when applying for state aids have, in particular, contributed to this result: The dissatisfaction among the companies that had difficulties to receive the money they have been promised was 36 percent higher compared to the companies that did not have to overcome any hurdles.
The summary of the study Empirische Erkenntnisse zum zweiten Lockdown: Unternehmensgewinne gehen weiter zurück, Unzufriedenheit mit Staatshilfen steigt stark an“ (Empirical findings from the second lockdown: Company profits decline, dissatisfaction with state aid increases” can be found here: https://www.accounting-for-transparency.de/german-business-panel_coronabefragung_februar-2021/
The study is based on the surveys conducted by the German Business Panel – the long term survey panel of the trans-regional Collaborative Research Center “TRR 266 Accounting for Transparency”, funded by the German Research Foundation (DFG). For more information, please see: https://gbpanel.org/