BERLIN, Jan. 24 (Xinhua) -- Small and medium-sized enterprises (SMEs) in Germany remain confident despite the economic downturn, according to the annual SME index 2020 compiled by the consulting firm EY (Ernst & Young) and published on Friday.

"Despite the difficult economic situation, the mood in large parts of the German SME sector is remarkably good," commented Michael Marbler, partner at EY, adding that "there can be no talk of a widespread crisis at present."

However, one out of ten SMEs in Germany described their business situation as generally bad. Last year, this figure was around three times lower. At the same time, the share of fully satisfied SMEs dropped from 65 percent to 57 percent.

According to EY, German entrepreneurs are "particularly concerned" about the general economic situation. Almost every third SME expects the economic situation in Germany to deteriorate and only 21 percent anticipate the economy to develop in positive way.

As a result, the willingness to invest and to hire new employees has been "significantly lower than in the previous year," according to EY. However, the share of SMEs planning to increase their investments and hire new employees is still larger than that of those without such expansion plans.

Although some SMEs in Germany, especially in the automotive industry and in mechanical engineering, have "switched to crisis mode," most of them are "still doing well or very well."

Only 31 percent of German SMEs in the automotive industry are satisfied with their business situation, a strong decline compared to the SME indexes for 2018 and 2019, which recorded 67 percent and 46 percent, respectively.

Compared to the other industries, the automotive industry has the highest share of SMEs planning to cut jobs. Eighteen percent of SMEs in the automotive industry are planning to reduce the number of employees, while only five percent aim to increase the number.

EY partner Marbler warned that the weakness of the German automotive industry and the mechanical engineering sector is "increasingly affecting" the associated sectors.

In Germany's booming construction industry, on the other hand, 68 percent of SMEs are "completely satisfied" with business development. Thirty-two percent of the country's construction companies even plan to hire additional employees, while only seven percent want to cut jobs.

"The situation of the German Mittelstand (SMEs) varies greatly depending on the sector," said Marbler. While service providers and the construction industry "continue to flourish," other sectors have "deteriorated significantly" in recent months. Enditem

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