The weakening global economy is now also hitting Germany’s Mittelstand, albeit not as strongly as many a large corporation. For on average the Mittelstand has less of an export focus and is geared more to serving the domestic market. As a rule this spells a slightly more stable course of business.
This is not the case, however, for the German mechanical engineering segment, which likewise has a structure that strongly hinges on SMEs. It is already suffering quite considerably from the US-Chinese trade conflict and the weakness of global trade. Indeed, the United States and China are by far the most important destinations for exports by German mechanical engineering companies, which have a very strong international focus.
While the German Mittelstand counts numerous world market leaders in what are often very special market niches, international competition has in recent years evidently become far tougher for the broader-based major corporations in Germany. At any rate, ever fewer German corporations are to be found in the Top 500 rankings of the world’s largest corporations by market cap.
Seven of the world’s ten most valuable companies today are tech corporations from the USA and China. By contrast, the broader mass of the European technology segment has lost touch with the leaders. Only SAP still plays an important role in its market. All in all, what is currently lacking in Germany are leading corporations in key industries, and Federal Minister for Economic Affairs Peter Altmaier is undoubtedly right on this point.