AHK survey: Business situation, economic outlook improve slightly, investment, hiring intentions remain low

The current business situation and economic outlook have improved slightly, but investment and hiring intentions remain at a low level, according to the autumn survey on economic conditions conducted by the Romanian-German Chamber of Commerce and Industry (AHK Romania).The research involved 79 companies, mostly from the industrial sector, which provided assessments of the current business situation, Romania's economic outlook, and the main risks.For most respondents, the current business situation has improved: 43% are satisfied, 53% consider it satisfactory, and only 4% rate it as poor. However, over the next 12 months, most companies (58%) do not expect changes in their business situation.Economic expectations have improved slightly compared with the spring survey. Thirteen percent of the companies surveyed believe that local economic performance will improve over the next 12 months (spring: 0%), 47% consider it will remain unchanged, and 40% (spring: 57%) believe it will worsen, according to AHK Romania."However, willingness to invest is declining. Many companies plan to reduce expenses (30%), and over 9% declare they will not make investments. Regarding hiring intentions, these will remain unchanged (66%). The intention to reduce staff has decreased, with only 14% of respondents indicating they will cut employee numbers," reads a press release from the organisation.Companies' main concern remains the politico-economic framework, and they are calling for the implementation of pending reform measures to reduce the budget deficit.Despite a slightly more favourable current situation, business sentiment is marked by significant uncertainty. In particular, the politico-economic environment and low demand are currently the most important risk factors from the companies' perspective, while rising labour costs exert additional pressure on competitiveness and lead to caution in investment."Confidence in the economic environment largely depends on reducing the budget deficit, which in turn depends on the implementation of announced reform measures. We need a sustainable state budget," said Sebastian Metz, General Director of AHK Romania.Volker Raffel, President of AHK Romania, warned that Romania cannot afford to lose significant EU funds, which are intended for the development of transport and energy infrastructure, health units, education, and the digitalisation of public administration."We cannot afford to lose significant EU funds intended for the development of transport and energy infrastructure, health and education units, and the digitalisation of public administrations, because these investments lay the foundation for a competitive and resilient economic environment and, therefore, sustainable economic growth," Volker Raffel emphasised.According to the survey, companies' assessment of current risks has changed compared with previous years. While in the past infrastructure and lack of qualified staff were the main obstacles to investment, these aspects are now secondary.Only 16% of respondents consider infrastructure a risk for investment, and the lack of labour plays a smaller role at present (29%). Currently, the focus is primarily on the politico-economic framework and low demand for products and services - 60.8% of companies cited these factors as central risks. In addition, rising labour costs concern companies (44%), continuing to affect competitiveness.