Only a third of the German companies in Romania expect the local business conditions to recover in 2021, after the deterioration caused by the COVID-19 crisis.

Meanwhile, 35% of the German companies expect the recovery to come in 2022 and 23% believe that the recovery will take much longer, according to the Business Outlook survey carried out by the German-Romanian Chamber of Commerce (AHK Romania).

The general sentiment among German companies in Romania has deteriorated significantly compared to last year’s edition of the survey.

Only 35% of the respondents believe their companies are in a good situation, down from 60%, while most respondents (55%) believe the situation of their company is satisfactory (up from 32% in 2019).

The share of companies that expect a better evolution in the next 12 months compared to the previous year has dropped from 35% in 2019 to 27% this year.

Meanwhile, the share of companies that expect a negative evolution has doubled from 13% to almost 26%.

Some 40% of the respondents believe the economic context will be worse for their business in 2021 (up from 30%) who said the same about 2020.

However, the share of respondents who expect a better context has also increased from 12% to 22%.

Meanwhile, the share of those who expect things to remain unchanged dropped from 58% to 31%. The negative expectations will also impact investments.

Thus, a third of the companies plan lower investments in the next 12 months (compared to 18% in 2019), while only 12% say they will invest more (down from 22% in 2019).

The hiring intentions have also worsened. The share of companies that will increase their workforce in the next 12 months has dropped from 33% in 2019 to 17% this year.

Meanwhile, 22% of the respondents will likely reduce their number of employees, up from 13% in 2019. The top measures companies take to limit the impact of the COVID-19 crisis are accelerated digitization (70%), cost cuts (69%) and postponing investments (57%).

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andrei@romania-insider.com