BERLIN, Oct. 24 (Xinhua) -- German "Mittelstand", or small and medium-sized enterprises (SMEs), are playing a crucial role in the country's ongoing labor market boom, a study published Tuesday by the government-owned Reconstruction Loan Corporation (KfW) found.
The term "Mittelstand" is commonly used in Germany to denote SMEs, but also has qualitative connotations such as family ownership, long-term focus, social responsibility, and strong regional ties.
Speaking to Xinhua, KfW chief economist Joerg Zeuner emphasized that China was an increasingly important market for the German Mittelstand.
"German firms want to participate in Asia's growth. Every tenth Mittelstand company has revenue in China and amongst the larger firms, the ratio is even higher at one in three."
Whereas large German corporations and the public sector have downsized their staff in the recent past, Mittelstand companies have gone on a hiring spree. As a consequence, these small and mid-sized firms have become the "cornerstone of the employment boom", a statement by the KfW read.
According to the Frankfurt-based banking group, the number of people employed by the Mittelstand rose by 4.9 percent in 2016 to a record level 30.9 million. By contrast, large corporations and the public sector laid off 432,000 employees during the same period.
Notably, small and mid-sized firms with annual revenue up to 500 million euros (588 million U.S. dollars) accounted, for the first time, for more than 70 percent of German jobs. There were around 44 million Germans in the workforce in 2016.
Excluding part-time positions, the number of jobs at Mittelstand companies still grew by 2.7 percent in the last year.
The KfW study further showed that revenue at German SMEs grew by the fastest pace in five years in 2016. The roughly 3.71 million Mittelstand firms considered by the authors saw revenue growth of 3.9 percent on average to a total of 4.5 trillion euros. (1 euro=1.18 U.S. dollars)
