Some are skeptical about the economic development, others are just recovering from a recent miserable situation: the economic picture of the Berlin economy is divided. This was the result of the annual representative survey by the Berlin Chamber of Industry and Commerce (IHK), which was presented on Monday. Above all, the war in Ukraine, the rapidly increasing energy prices and problems in the supply chain are “slowing down” the positive development in the economy, according to the chamber.
Industry, construction and trade in particular are skeptical about the coming months. According to the IHK, the guest tissue, recently badly hit by the lockdown consequences during the corona pandemic, is more optimistic than at the beginning of the year.
According to the IHK report, the economic climate index is 119 points, four points less than at the beginning of the year. It reflects the results of the IHK economic survey of more than 500 companies; the survey period was April 19 to May 6 of this year.
In the service sectors, business is increasing moderately compared to the beginning of the year. Trade, personal and business-related services reported increasing demand, albeit far from the pre-Corona level. In the hospitality industry, the index of the business situation rose to a positive value of eight points for the first time in two years (after -80 at the beginning of the year).
“Seasonal and, above all, post-pandemic effects are giving these sectors a tailwind: consumers are apparently catching up on hospitality, cultural and tourist offers, which was only possible to a limited extent or not at all in the past two years,” the report said.
In the logistics and transport sectors as well as in the manufacturing sectors, on the other hand, business momentum is slowing down, in some cases considerably. The companies have been struggling with rising prices and disrupted supply chains for months. 68 percent of the companies report delivery difficulties “of medium to significant extent”.
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The extent varies from industry to industry. Almost all of the industrial companies surveyed (98 percent) and companies in the hospitality industry (97 percent) suffer from delivery problems. Even in trade or construction, just seven percent of those surveyed do not feel any delivery bottlenecks.
A similar picture emerges for rising prices. Almost every second company is affected by increases to a significant extent, and another 28 percent by increases to a moderate extent. The main causes are rising energy prices (67 percent), higher costs for goods (65 percent), rising labor costs (49 percent) and more costs for services (44 percent).
Business expectations are declining in almost all sectors: pessimistic expectations outweigh optimistic ones in trade, construction and industry. 40 percent of those surveyed in industry expect business to slow down, and a significant number of service companies (19 percent) also assess the prospects as worse than at the beginning of the year.
The development of prices and the unclear security of supply of energy sources, preliminary products and raw materials are more risky than they have been for a long time. This also affects the general consumer climate. Insecure consumers buy less – that is the concern of retailers, it said. Here, too, 32 percent of those surveyed expect business to deteriorate in the coming months.
Jan Eder, General Manager of the IHK Berlin, said: “We are confronted with economic problems of global proportions. Berlin politics alone will not be able to fix it.” But improving the framework conditions could help to alleviate some of the burden. The restart program of Economics Senator Stephan Schwarz (independent, for the SPD) is a good signal for this, but further structural improvements are needed.
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“The burden of possible energy supply bottlenecks and rising energy costs for Berlin companies must be kept as low as possible. The planned oil embargo threatens to spread the burden between East and West Germany in the supply of petrochemical products and the consequential costs to Berlin’s disadvantage,” said Eder.
Politicians must definitely take this distortion of competition into account in their planning. In addition, in view of further rising prices and interrupted supply chains, companies in the construction industry should be relieved as quickly as possible.