Container port: Sentiment among German companies remains depressed due to rising interest rates and the sluggish global economy. © Jonas Walzberg/dpa
The economic expectations of German companies are clouded. Above all, rising labor costs are weighing on sentiment.
Berlin - Labor costs are becoming an ever-increasing problem for the economy due to the shortage of skilled workers and stubbornly high inflation. In a recent survey by the German Chamber of Industry and Commerce (DIHK), 53 percent of companies cite this as an important business risk, as the association announced in Berlin on Monday. "This is a new high."
In the previous survey at the beginning of the year, it was only 49 percent. Recently, there had been collective bargaining agreements with significant wage increases in several industries. In the service sector, the risk of labour costs is perceived above average - for example in the catering industry (73 percent), in the taxi industry (67 percent) or in the security sector (65 percent).
According to Ilja Nothnagel, member of the DIHK Executive Board, companies should cultivate their brand and image in order to make themselves attractive to workers. The compatibility of family and career must also be improved. In addition, more immigration of skilled workers and less bureaucracy is needed. "This will remain an ongoing issue."
Energy and commodity prices weigh on the economy
Energy and commodity prices continue to be the biggest business risk, but with a downward trend. 65 percent of the companies still cite this as a problem, compared to 72 percent previously. 62 (previously 60) percent cite a shortage of skilled workers as a difficulty. "In the service sector, the shortage of skilled workers is now again cited as the most common risk and has overtaken the risk of energy and raw material prices," says the DIHK.
More and more companies are also feeling the consequences of the sharp interest rate hikes with which the European Central Bank wants to get inflation back under control. 33 percent of the more than 21,000 companies surveyed report severe restrictions on accessing debt capital - i.e. loans. In the previous year, it was only 22 percent. "It is to be feared that investment projects will become unprofitable in some cases and thus be omitted altogether." 36 percent of the companies whose financing is particularly affected planned to reduce investments. Looking at all companies, the figure is only 24 percent.
No growth, but high inflation
The association expects the economy to stagnate this year with inflation remaining high. There is a lack of thrust, said Nothnagel. After growth of 1.8 percent in 2022, DIHK experts are now predicting 0.0 percent for 2023. A modest increase in private consumer spending, which is forecast to increase by only 0.5 percent this year, is likely to contribute to the meager development. In 2022, it was 4.3 percent. According to the DIHK, the fact that the inflation rate will remain high this year at 6.0 percent (2022: 6.9) percent is likely to contribute to consumers' reluctance to buy. Exports are expected to grow by only a meager 1.0 percent, down from 2.9 percent in 2022. With its forecast, the DIHK is well behind the assessment of many economists. The leading German economic research institutes expect an increase of 2023.0 percent for 3.
As at the beginning of the year, 34 percent of the companies in the DIHK survey rate their situation as good, 51 percent as satisfactory and 15 percent as bad. The resulting balance of "good" and "bad" answers is thus unchanged at 19 points and slightly below the long-term average of 21 points. (RTR/UTZ)