The economic situation of companies with German capital in Romania worsened this autumn, and most of them are also pessimistic about the future, according to the results of a survey conducted by the Romanian-German Chamber of Commerce and Industry (AHK Romania) in October 2023.

Uncertainty caused by geopolitical risks and reduced demand amid high inflation and interest rates are the main reasons, as well as the lack of skilled personnel and changing labor costs are reasons for concern for many companies. The survey assesses both the economic situation and the business situation of companies, and provides an overview of the most important economic risk factors from the perspective of companies. Decisive factors for making an investment decision are also listed.

See the full survey results here

Only 17.1% of surveyed companies expect the economic situation in Romania to improve over the next 12 months, compared to 22% in the spring, while 38% believe it will remain the same. The majority (44.7%) believe that the economic situation will worsen (Spring 2023: 26%).

Regarding their own company’s performance, the majority (46.1%) believe it will remain the same, while 17.7% expect their performance to deteriorate in the coming months (Spring 2023: 15.9%). The number of those who expect the situation in their own business to improve has decreased: only 34.2% (spring 2023: 46.2%) of companies remain optimistic.

All this led to the fact that a reduction of investment plans, and the intention to hire new employees decreased. More than 30% of respondents say that they will reduce investments (spring: 24.4%). Thus, for 38.2%, the volume of investments remains unchanged, while 6.6% of surveyed companies do not plan any investments in the next 12 months.

Only a quarter of respondents still intend to increase investment locally (Spring 2023: 39.7%). It is also important to see in which areas German companies in Romania make significant investments and which factors play a decisive role in this.

The majority (47.7%) of those who intend to invest plan to invest in production, as well as in sales and marketing. Research activity is also considered by 22.3% of respondents.

Market size and proximity to customers are the most important factors influencing the investment decision. Romania, with its 19 million inhabitants, membership in the EU family and proximity to Western Europe, remains a good choice for German investors.

In most companies, the number of employees remains unchanged (Fall 2023: 57.3%, Spring 2023: 42.4%), but the number of companies willing to hire new employees decreases significantly (Fall: 26.7%, Spring: 41.7 %).

Companies with German capital in Romania think so low demand for products and services (63%) and lack of qualified personnel (61%) are the biggest risks, but labor costs (51%) and political and economic conditions (43%) are also concerns among respondents.

In addition to the answer options, companies had the opportunity to indicate other factors that play a decisive role for local investments. They noted the lack of predictability due to frequent legislative changes, such as changes to the Tax Code, the international economic and geopolitical situation and the demand from its customers, which fell sharply.

“Despite all 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. But, as the results of this survey once again show, for this we need an economic environment that is business-friendly, competitive and, above all, predictable,” says Sebastian Metz, CEO of AHK Romania.

The results of a global survey by the German Chamber of Commerce and Industry (DIHK) of more than 3,600 German companies operating abroad and companies with close ties to Germany show that there is no sign of a significant recovery worldwide due to the fall in global economy. engines during the year.

As a result, in the fall of 2023, German companies are less optimistic about the economic development of the investment territories where they operate internationally than in the spring.

In Europe, expectations for economic development are negative and in some cases significantly worsened compared to the previous survey. Low demand is currently considered the biggest risk to business worldwide (46%), followed by economic policy (42%) and lack of skilled staff (37%).

“Decreasing demand from China and geopolitical risks are having a negative impact on the business of German companies operating around the world,” says Volker Treier, Head of Foreign Trade at the DIHK. The full results of AHK’s World Business Outlook can be viewed worldwide. here (in English).

The AHK World Business Outlook survey was conducted between September 25 and October 20, 2023. The conflict in the Middle East, which broke out on October 7, did not have a significant impact on the expectations of companies during the survey period. 76 Romanian companies participated, of which more than half (54%) work in industry and construction, 30% in the service sector and 16% are commercial companies.

AHK Romania is the official representative of the German economy. Founded in 2002, AHK has more than 620 member companies and offers companies an important platform to network, share information and experience. Through the services it offers and through the events it organizes, AHK Romania actively supports German companies when they enter the Romanian market, and is also a partner of Romanian companies interested in the German market. Since January 1, 2020, the Competence Center for the Republic of Moldova has also been operating as part of AHK Romania. Thus, we want to intensify business relations between companies from Romania, the Republic of Moldova and Germany and make a significant contribution to the economic development of the Republic of Moldova.