(21.09.2022) Small and medium-sized companies are facing an increasingly uncertain economic environment. Following the downward trend that began in June, the Raiffeisen PMI-SME index, which surveys around 200 manufacturing companies, stood at 50.6 in August and is close to the contraction zone (<50).
After reaching relatively high levels in the spring of 2022 (59.1 in April and May) thanks to the post-Covid recovery--characterized by sustained demand--the overall index declined sharply from June (52.3). Despite a slight recovery in July (52.8), it subsequently fell back to 50.6 in August, reaching its lowest value since the Omicron variant emerged during December 2021 to January 2022.
The order book and production subcomponents were the main contributors to this decline, which was caused by falling demand for industrial products. With values of 49.3 (-3.2 points) and 45.0 (-5.6 points) respectively, both sectors dropped below the growth threshold (50) and consequently entered the so-called "contraction zone".
The level of the employment (51.4, -0.4 points) and merchandise inventories (52.8, +0.4 points) subcomponents remains more stable, but in a zone close to the growth threshold. Only the delivery time subcomponent (59.9, +1.3 points) managed to perform better, although this was due to difficulties in international supply chains. Without the latter, the overall index would have already fallen below 50.
In addition to the drop in exports due to the vagaries of international markets, some companies are already facing the immediate impact of soaring energy prices. This situation is likely to jeopardize the development prospects of many SMEs, which fear for their future.
Last modification 21.09.2022
