Significant Rise in SME Economic Climate Index in H2 2024

The index for small and very small enterprises showed significant improvement in the second half of 2024, according to research by the Institute of Small and Medium Enterprises. The economic climate index for these businesses rose by approximately ten units compared to the previous semester, reaching 59.3 units. However, detailed findings reveal discrepancies based on enterprise size, with very small businesses (0-9 employees) facing greater challenges. Uncertainty, reduced workloads, lack of funding for significant investments, liquidity issues, and increased operational costs threaten further contraction of very small business activity. A major issue highlighted is liquidity, with 45.4% of businesses reporting reduced liquidity in H2 2024, and half stating insufficient funds for more than a month. This liquidity shortage affects investment capabilities, as most rely heavily on personal capital. High employment difficulties persist, with over one-third struggling to fill job vacancies. Operational costs have surged nearly 40% for over 90% of small and very small enterprises since the energy crisis began. As a result, almost one-third increased their prices in H2 2024 without signs of significant relief.