AHK Business Outlook, Spring 2022: The current business situation is good, but the economic outlook is at an all-time low
Companies are facing many challenges following the Coronavirus pandemic and the backdrop of the war that broke out in Ukraine. However, about half of the companies surveyed are doing well. This is shown by the current business questionnaire conducted by AHK Romania in April 2022.
This shows the current assessment of the economic situation and the situation of companies, but also provides an overview of the most important risk factors in business development in terms of of companies, both in general and because of the war in Ukraine.
The current situation of German companies in Romania has deteriorated to some extent, but most continue to appreciate it as “good” (over 51%, fall 2021: 67%). More than 37% of respondents consider that their company’s situation is satisfactory, and the remaining 10.7% consider that the situation is currently difficult. Most companies continue to rate their business expectations as “unchanged” (2022: 48%, Fall 2021: 46.9%). “But. 10% of respondents believe that their activity will deteriorate in the next 12 months. More than 40% still expect an improvement (2022: 42.9%) in the economy. On the other hand, the local economic development in the next 12 months will deteriorate considerably in the opinion of the companies participating in the survey (over 50% of respondents). Only 10.7% expect an improvement (2021: 20.4%), while 37.5% expect that the economic evolution will remain “unchanged” in the next 12 months. The balance reaches an all-time low of -41 points this year.
“We are living in very difficult times and we are once again in a partially paradoxical situation. Despite the obviously negative economic outlook, the companies surveyed still want to invest in Romania and, especially, to increase the number of employees. Despite the crises, most of the companies surveyed are doing well at the moment “, says Sebastian Metz, general manager, AHK Romania.
Due to the current good business situation, the willingness to invest remains high. For the next 12 months, 25% of companies plan higher investment expenditures (2021: 36.7%). 44.6% believe that they will not change (2021: 32.7%) and only 19.6% believe that they will reduce investments. It is encouraging that companies are willing to continue to hire staff. 41.1% of the interviewed companies even intend to increase the number of employees (2021: 40.8%). For 39% of respondents, the number of employees will remain at the same level (2021: 42.9%), and 19.6% of respondents say they intend to hire fewer staff (2021: 16.3%).
In terms of risk factors in economic development, rising commodity and energy prices clearly dominate the crisis agenda of companies. However, the shortage of skilled staff and labor costs also remain on the companies’ priority list. With regard to the war in Ukraine, most of the companies surveyed consider that the increase in energy and raw material costs is a short-term consequence of the war. Supply chain disruptions and logistics problems, as well as a lack of raw materials and services in advance, are also among the consequences of the current crisis.
“From our discussions with company representatives, we learned that the current situation of each company depends mainly on its market position or prices and the specifics of the company – a” one-size-fits-all “statement is not possible. , as happened during the Corona crisis. Many companies are currently caught in the middle. They face significant increases in commodity and energy prices on a daily basis, supply bottlenecks, increasing competitive pressure on the labor market and high wage increases that cannot be offset by rising productivity. These high costs often cannot or do not always be fully transferred to customers or cannot be absorbed by the market “, says Sebastian Metz, General Manager of AHK Romania.
AHK Romania participated in the “AHK World Business Outlook” economic survey coordinated by the Association of German Chambers of Commerce and Industry (DIHK). Companies around the world were asked about their investment and employment plans, as well as the most important business risk factors in the countries in which they operate. The survey was attended by 56 companies from Romania, of which 62.5% from industry and construction, over 23% from the services sector, and the rest are companies. The survey was conducted in March and April.