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Germany's family businesses remain optimistic

By Rashmi Kumar

Family businesses in Germany are becoming “more realistic” about the economic outlook, despite businesses in the European country reporting lower levels of confidence overall, according to the country’s main family business pressure group.

A spokesman for Die Stimme Der Familienunternehmer told CampdenFB that Germany’s family businesses are not very pessimistic about the global economy.

“Family businesses are expecting stabilisation and are more realistic about their company performance. Some firms are anxious and doubtful about eurozone issues, but they are not expecting a deep drop in markets,” he said.

His comments follow the release of the August business climate index by Munich-based Information and Forschung Institute, which said overall business confidence in Germany has declined significantly this month, reaching the lowest level since June last year.

“The companies have scaled back their expectations of business developments in the coming half year. The firms no longer assess the current business conditions as favourable,” the report said.

Consumer confidence across the eurozone also experienced the fastest decline in two decades.

But Die Stimme Der Familienunternehmer said that Germany’s family businesses are still holding out hope. The group’s spokesman quoted a recent survey of 376 family businesses in Germany, which found that a majority don’t plan on reducing their workforce, while around 35% of families are looking to create more jobs.

Many family businesses also want to expand, the spokesman added.

According to the survey, more than 30% of the respondents plan to up their investments in the fourth quarter of this year, while around 40% of family businesses have expansion plans for early 2011.

But the survey did not reveal whether the investments would be made in Germany or overseas – the country’s economy has been turbulent, with a slowdown in the second quarter’s gross domestic product – GDP grew by just 0.1% when compared with the previous quarter.

The spokesman said that despite the unpredictability, family businesses in the country are not stalling on their investment plans.

Germany is home to some of the world’s biggest family-controlled businesses including automobile maker BMW, manufacturing firm Freudenberg and consumer goods company Henkel. Around 95% of the country’s businesses are family controlled.

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