Business risks remain the same
“Bad sentiment among companies is becoming more entrenched”
February 15, 2024, 3:53 p.m
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There is still a bad mood among German entrepreneurs. According to a survey by the Chamber of Commerce and Industry, a good third have negative business expectations for the coming year. The problems are diverse. However, there is a ray of hope.
The bad mood among entrepreneurs in Germany continues in view of a variety of problems. Business expectations, which had been severely clouded by the energy crisis, remained at a low level, as shown in the economic survey by the German Chamber of Commerce and Industry (DIHK) presented in Berlin. The only ray of hope is the export expectations due to the improved situation in the global economy.
As in the previous year, a good third of entrepreneurs currently have negative business expectations for the next twelve months, explained the DIHK. Only one in seven expects an improvement. 29 percent of those surveyed see the current business situation as positive, while 21 percent rated it as bad. Compared to the previous year, the mood among companies did not fall any further, but it is now significantly worse than the long-term average for the second year in a row. “The bad mood among companies is becoming more entrenched,” says the DIHK.
Framework conditions as a business risk
The most important business risks have also remained largely the same: high energy and raw material prices, the economic policy framework, the shortage of skilled workers, domestic demand and high labor costs were each mentioned by more than half of those surveyed. The biggest change was in the general conditions: “It is worrying that almost three out of five companies now see the economic policy framework as a business risk,” explained DIHK General Manager Martin Wansleben.
A total of more than 27,000 companies “from all sectors and regions” were surveyed. The DIHK explained that more than 7,600 of them had made use of the option of free text answers in the economic policy framework. By far the most frequently mentioned keyword was “bureaucracy”. However, the mood has improved among internationally active companies with more than 1,000 employees. “You benefit from significantly improved export expectations, given the surprisingly resilient development of the global economy,” explained the DIHK experts. Overall, export expectations are brightening, but significantly less so for smaller companies.
As a consequence of the information, the DIHK is forecasting “a further decline in economic output of 0.5 percent for 2024,” explained Wansleben. It would be the second time since the Second World War that economic output fell two years in a row. “This is a clear alarm signal that Germany and Europe must take seriously,” warned the DIHK managing director.