Around 60 companies, mostly from industry and construction, expressed their opinions on the current situation of their businesses, the economic development in Romania, investment intentions and competitiveness. The survey also assesses the main factors that define Romania as an investment location.
For the majority of respondents, the current situation of their own businesses remains unchanged, and 43.1% are optimistic about the next 12 months. However, economic expectations have deteriorated. Only 12% of the companies surveyed believe that the economic situation will improve in the coming year, while 44.8% believe that it will remain unchanged, and 43.1% estimate that the economic situation will worsen.
The willingness to invest has decreased compared to the spring survey. Many companies plan to reduce their expenses (24.1%), and over 10% declare that they will not invest at all. Hiring intentions have visibly decreased, with a quarter of respondents anticipating a decrease in the number of employees in the next 12 months.
The main risks to economic development identified by German companies in Romania are: rising labor costs (32%), political-economic framework conditions (31%) and low demand for products and services (31%).
The survey shows that rising costs represent a major challenge for companies. The significant increase in labor costs and raw material prices is putting pressure on competitiveness.
“The era when Romania was considered a low-cost location is long gone. Companies are now facing significant increases in wage costs – the gross minimum wage increased from RON 2,230 in 2021 to RON 3,700 in 2024 – and higher raw material prices, which are considerably affecting their competitiveness. Companies need to develop new strategies to succeed in an increasingly demanding market,” explains Sebastian Metz, CEO of AHK Romania.
Low demand is another major problem: declining customer demand, especially in Western Europe, is reducing expectations for economic growth and revenues. Added to this is uncertainty about future economic policies.
“A predictable economic framework is essential for companies to invest and plan for the long term,” emphasizes Metz, especially in the context of the presidential and parliamentary elections in Romania. “After the elections, it is crucial to regain the trust of companies in stable business conditions.”
Almost a third (29%) of the companies surveyed assess their competitiveness as “negative”, 21% consider it “positive”, and 50% perceive it as “neutral”.
The main factors influencing competitiveness, according to the companies, are government support programs, sustainability requirements and cost structure. Support programs are perceived as having a positive impact on competitiveness. In contrast, sustainability (ESG) requirements generate a mixed impact. They can provide competitive advantages for companies that implement them effectively, but become a burden for those that are overwhelmed by bureaucratic requirements and costs, especially SMEs. Increasing costs is a decisive factor that negatively affects competitiveness.
“We welcome the government support policy in Romania, because companies need, especially in these difficult times, targeted measures to improve their competitiveness. In the context of the costly adjustment to sustainability requirements, SMEs, in particular, need support,” concludes Metz.