German Mittelstand companies double down on global expansion despite supply chain friction
Study finds a significant number of companies plan for ownership transitions in the medium term, mainly within the family, but also externally
Undeterred by supply chain challenges thrown up by COVID-19, German businesses are doubling down on globalization, embracing technology as a means to adapt, and planning for ownership transitions in the medium term, according to J.P. Morgan’s inaugural Germany Business Leaders Outlook survey released today.
J.P. 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 being fueled by three-quarters of respondents reporting that they anticipate revenue/sales and profits will increase in the year ahead.
While many executive leaders are optimistic about the future, they’re faced with the realities of an unpredictable operating environment. According to the survey, top challenges include:
“Businesses operate in a world in constant change, but this past year required them to pivot and invest in their operating models in new and challenging ways—from technology adoption for remote employees to managing their supply chains,” said Bernhard Brinker, Head of Commercial Banking, J.P. Morgan Germany. “However, companies are optimistic that the changes they’ve made over the past year will help them be increasingly efficient within the year and poised for growth domestically and internationally.”
In addition to planning for operating challenges, German businesses responded to 2020’s economic realities by shifting their operating models and adapting their business strategies to maintain some level of success in the new environment. As they begin to look toward a post-pandemic world, German executives are now looking to progress their businesses in new ways, including:
“Mittelstand companies are the engine of the German economy. We look forward to continuing to serve this core section of our client base as many look to expand beyond their traditional border and fulfil their international ambitions, and as we expand our footprint in this important segment in the market,” said Stefan Povaly, Head of J.P. Morgan Germany, Senior Country Officer.
For more information on the 2021 J.P. Morgan Business Leaders Outlook in Germany, visit www.jpmorgan.com/businessleadersoutlook-germany.
J.P. Morgan’s Business Leaders Outlook survey was conducted online from March 10-29, 2021. In total, 238 senior executives (CEOs, CFOs, heads of finance and owners) from German Mittelstand companies, with a majority of annual revenues ranging from $100 million to $2 billion participated in the survey. Results are within statistical parameters for validity, and the error rate is +/-6.4% at a 95% confidence rate.
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