German companies in Romania expect economic slowdown

1 year ago 35

German companies operating in Romania expect the country’s economy to slow down, according to a survey by the Romanian-German Chamber of Commerce and Industry on Monday.

The survey was carried out by the Chamber of Romanian-German Trade and Industry (AHK Romania) in October.

German companies with investments in Romania have become more pessimistic about the future in the country after a worsening of their economic conditions this autumn, the survey showed.

Among the main factors contributing to this negative outlook are the uncertainty caused by geopolitical risks, a decline in demand amid high inflation and interest rates, and concerns about the lack of skilled workers and the development of labour costs, according to the survey.

Only 17.1% of the companies surveyed expect the economic situation in Romania to improve in the next 12 months, compared to 22% in the spring.

In contrast, 44.7% believe that the economic situation will worsen – a significant increase from 26% in spring 2023. A further 38% expect the situation to remain unchanged.

Of those considering investment, 47.7% plan to invest in production, manufacturing, sales, and marketing.

While the number of employees remains stable in most companies, there is a noticeable decrease in the percentage of companies willing to hire new staff (26.7%, compared to 41.7% in the spring).

German companies in Romania consider the low demand for products and services (63%), the lack of qualified staff (61%) and labour costs (51%) to be the main risks.

In addition, respondents are concerned (43%) about the political-economic environment, including the lack of predictability due to frequent changes in legislation, both in the tax code and in the international economic and geopolitical landscape. A sudden drop in customer demand is also highlighted as a challenge.

“Despite the challenges and risks, the prospects for German companies in Romania and for bilateral economic relations are good, and I believe that Romania will continue to attract new investments,” said Sebastian Metz, Director General of AHK Romania.

There needs to be a “business-friendly, competitive and, above all, predictable economic environment”, he added.

(Cătălina Mihai | Euractiv.ro)