Survey led by University of Mannheim shows December lockdown hardly affects profits but leads to redistribution within closed industries

The second lockdown poses another challenge for companies. These will continue to grow if the federal and state governments decide tomorrow, as expected, to extend business closings and further restrictions on business life. The corona survey conducted by the German Business Panel (GBP) at the University of Mannheim shows the consequences of the second lockdown so far for companies and the economy. A central finding of the study: corporate profits fell by a total of more than 16 percent during the Corona crisis in 2020. However, the tightening of government measures in December did not exacerbate this decline any further. The slump in profits suffered in the first half of the year was halted by government aid measures in the second half of the year.

Over 10,000 companies across Germany regularly take part in the representative study by the German Business Panel. Based on current data collected up to December 30, 2020, the study examines how the previous measures have had an economic impact on companies in the past year: Who is most burdened by the restrictions and who benefits? Where does the redistribution of profits occur? And how does this affect the assessment of the overall economic situation?

The picture for expected corporate profits is mixed. For the year as a whole, those surveyed are currently anticipating a decline in corporate profits of 16.6 percent. However, this value has recovered slightly compared to the first half of the year. In the summer the value was still 22 percent. At the same time, state aid is rated slightly more positively than it was in the summer. At that time, 54.2 percent of the companies rated the aid measures as sufficient. In November / December 58.5 percent of companies are of this opinion.