Hard Brexit won’t hit us, 60% of Germany’s small companies say

BERLIN — Around 60% of Germany’s Mittelstand, the small and mediumsized companies that form the backbone of Europe’s biggest economy, see no impact on their business from a hard Brexit, a survey by Germany’s KfW state development bank showed on Friday.

With the United Kingdom due to leave the world’s biggest trading bloc on Oct. 31, Brexit remains deeply uncertain; it remains unclear on what terms it will leave or indeed whether it will leave at all.

The KfW survey of around 2,000 firms with annual revenues of up to €500 million ($550.60 million) found that about a quarter of Germany’s Mittelstand expected a hard Brexit to disadvantage them.

“Shortly before what might be a hard Brexit, the German Mittelstand is largely keeping its cool: It’s only a matter of concern for a small proportion of companies,” said KfW economist Jennifer Abel-Koch.

The German economy contracted in the second quarter and many economists expect it to slip into a recession in the third quarter, with the possibility of Brexit a risk for the overall economy that is largely dependent on exports.

The KfW survey found that 15% of Germany’s export-oriented services providers such as law, tax and business consultancies, actually expect a hard Brexit to help them.

KfW said reduced competition from rivals in Britain could play a role in these firms’ optimism, as well as an increased need for consulting from companies who need to adjust their business relationships if there is a hard Brexit. —