Small and medium-sized businesses in Germany, the backbone of the country's economy, expect 2003 to be gloomy, according to a survey conducted by a trade association. Ninety-nine percent of the 3.3 million German companies are considered to be small or medium-sized, and 69.7 percent of all workers are employed by such companies. Of the more than 200 companies that responded to the survey, nearly 50 percent said they expected to lay off more people this year. Such layoffs could drive the country's unemployment rate of more than 10 percent higher in the months to come. "The mood is the worst that it has ever been," said Frido Flade, vice president of the Munich trade group that conducted the survey.