Struggling financial situations painted in a discouraging light for Small and Medium Enterprises, according to recent survey findings
Small and medium-sized enterprises (SMEs) in Austria are encountering a range of economic challenges in 2025, according to a survey conducted by KMU-Finanzinsider.
- Inflation and Cost Pressures: The survey reveals that many SMEs are grappling with increased costs for raw materials, energy, and transportation, which are squeezing profit margins and driving up prices.
- Interest Rate Increases: Higher interest rates have made borrowing more expensive, limiting SMEs' ability to finance growth or cover operational expenses effectively.
- Supply Chain Disruptions: Ongoing global and regional supply chain uncertainties continue to impact the availability and cost of inputs necessary for production and service delivery.
- Skilled Labor Shortages: Difficulties in recruiting and retaining qualified employees are hindering operational capacity and innovation among SMEs.
- Digital Transformation and Investment Needs: While many SMEs acknowledge the importance of digitalization, insufficient financial resources and expertise delay the adoption of new technologies.
- Regulatory and Tax Burdens: Complex regulations and tax policies are adding administrative overhead and costs, impacting competitiveness.
These challenges collectively contribute to a cautious business outlook among Austrian SMEs in 2025, prompting calls for targeted support measures.
Personnel, energy, and rent were identified as the main cost drivers for the surveyed companies. However, the survey did not provide information about the outlook for 2025.
Mag. Gerald Zmuegg, Managing Director of KMU-Finanzinsider, states that the government's current measures and those planned for 2026 will not lead to any relief for the companies. He urges the government to reduce the rejection rate of bank loan requests from SMEs to allow them to implement consolidation measures and bring their company out of the red.
An increase in state guarantees for bank loans and private investors is necessary, according to Mag. Gerald Zmuegg. New lending regulations by the FMA are also urgently needed.
The survey, conducted from March 15 to 31, 2025, involved 1,067 SMEs in Austria with a balance sheet total of up to 25 million euros. Only 41% of the respondents expect an improvement or anticipate a positive result for 2025, according to the survey.
Almost 63% of the companies registered a decrease in sales after the first full year after the end of lockdown measures, and 64% reported an increase in costs compared to the previous year, despite a decrease in price dynamics.
For almost 48%, 2025 will apparently be a year of consolidation, in which they want to take measures to successfully counteract the pressure from rising costs and falling sales. Only 12% of the surveyed companies expect an improvement due to the government's program, according to Mag. Gerald Zmuegg.
Mag. Gerald Zmuegg, Managing Director of KMU-Finanzinsider, stated that while revenues at least partially offset costs in 2023, this was not the case in 2024. 81% of the surveyed companies reported a loss for the year 2024.
No information was provided about the potential impact of the findings on the Austrian economy as a whole.
- Economic and Social Policy Adjustments: Given the financial struggles faced by Austrian SMEs, it is crucial for the government to reconsider its economic and social policies to better address the challenges, such as increasing state guarantees for bank loans and implementing new lending regulations.
- Business Financing Solutions: To alleviate the burden of higher interest rates and enable SMEs to finance their growth effectively, the government might need to consider reducing the rejection rate of loan requests from these businesses, thus allowing them to implement consolidation measures and improve their financial situation.
