Low economic sentiment in northern Rhineland-Palatinate: What does this mean for investors?

Press release from February 16, 2024

Economic development in northern Rhineland-Palatinate was already on the verge of recession last autumn. And even at the beginning of the year, the commercial economy is still in a low mood.

Koblenz. According to the latest economic survey by the Koblenz Chamber of Industry and Commerce (IHK), the IHK economic climate index, the economic mood barometer for the current business situation and future prospects for the commercial economy, is at 85 points - the same value as in autumn 2023. The mood of companies is therefore still below the 100 point mark, the border between positive and negative overall sentiment.

The business situation of companies is changing, prospects remain pessimistic
The current business situation of companies in the Koblenz IHK district is becoming increasingly critical. 27 percent of companies rate their situation as good (beginning of 2023: 33 percent), 31 percent as bad (beginning of 2023: 19 percent) and 42 percent rate their situation as remaining the same (beginning of 2023: 48 percent). While the balance of positive and negative answers was plus 14 a year ago (at the beginning of 2023), it has continuously decreased over the last year and is now minus four. The companies that rate their current situation as bad predominate for the first time since the start of the corona pandemic in spring 2020. The climate index is therefore in negative territory in all sectors. This also affects the financial substance: a quarter of all companies state that their financial situation is significantly influenced by a decline in equity.

Companies' business expectations for the next twelve months are also not very hopeful: 51 percent, or more than half of the companies, expect business development to remain the same at most and 37 percent even expect worse business development (balance: minus 25). Since the beginning of the Russian war of aggression on Ukraine, business prospects have been continuously negative.

70 percent of companies report high levels of economic policy uncertainty in the area of ​​business risks, with particular mention being made of the increased cost burden (57 percent) and the shortage of skilled workers (52 percent).

Politics must ensure planning and relief
"In view of this worrying situation, economic policy must finally provide orientation and provide impetus for economic development. The economy needs less bureaucracy, faster approvals and reliable infrastructure investments," concluded Fabian Gättlich, managing director of the IHK Koblenz's advocacy group.

The economic survey was conducted from January 3rd to 23rd, 2024. 379 companies with a total of around 60,500 employees from the Chamber of Industry and Commerce Koblenz took part. (PM)