KfW: SME confidence drops amid US protectionism

Confidence among small and medium-sized enterprises in Germany dropped again in May - with the protectionist policies of Donald Trump's US government, as well as the formation of an anti-euro government in Italy, dragging business sentiment down further.

Confidence fell by one point to 13.9 balance points. SMEs' business expectations in particular are on the decline and, after a drop of 1.4 points to 2.1 balance points, are now just slightly above their long-term average level. But the current business situation remains on an unusually high level, even if it is seen as slightly weaker than in the previous month (-0.6 points to 26.6 balance points).

"The euphoria is gone and worries are growing," said Dr Jörg Zeuner, Chief Economist of KfW Group.