IHK-Survey - Economic mood remains gloomy - no summer fairy tale
Despite decreasing inflation, the mood in Niedersachsen's economy remains gloomy. The conjunctural climate remains at a low level in the second quarter of 2024, as more than every fourth company assesses its business situation as poor, according to the Industry- and Trade Chamber (IHK) in Hannover. Expectations for the future also remain unchanged. This is the result of the latest IHK survey.
"The economy in Niedersachsen is not progressing, the industry lacks impulses, private consumption is stagnating," said Maike Bielfeldt, CEO of the IHK Niedersachsen, at the presentation of the report in Hannover. The hope that the European Football Championship in the country could be an economic "Summer Fairy Tale 2.0" and stimulate consumption, has unfortunately not come true. "There's nothing to see of that yet. The hoped-for change has completely disappeared."
For the survey, which the IHK conducts every three months, 1,806 companies in the country were questioned between June 20 and July 8. Only 17% of the surveyed companies assessed their current business situation as good, one percentage point less than three months ago. Unchanged were 27%, who assessed the situation as bad, and 56%, who were satisfied, the same as in the spring.
Consumer reticence and order drought are burdening
The prospects for the future also remain gloomy: only 10% expect improvement in the coming months, one percentage point less than three months ago. Nearly every third company (32%) expects further deterioration. In the spring, it was 34%. 58% expect unchanged development, the same as in the spring.
"The economic situation is just like the weather," said Bielfeldt. "It's gloomy, it rains, it hails, there are clouds. But there are also bright spots. But it's not a Summer Fairy Tale." The industry is suffering from low order intake, which 46% of the surveyed companies consider too low. The retail trade is facing the consumption reticence of customers, as are restaurants.
Additional income is invested in vacations
The recently good wage agreements have not changed anything in the retail trade, according to Bielfeldt. Instead, the additional income seems to be invested more in vacations. This at least helps the North German accommodation industry, where booking figures are satisfactory. The construction industry is also doing well overall, thanks to a high order backlog. However, this does not apply to residential construction, where the situation is becoming increasingly critical.
The biggest problem for companies is now the economic political framework conditions, which were criticized by 69% of the respondents. This is even more than before three months and the highest value ever measured by the IHK. "A clearly investment-friendly course is necessary so that Germany does not become dependent," demanded Bielfeldt. Necessary above all are tax relief and a real bureaucracy reduction.
However, she added, looking at the recently announced plans of the traffic light coalition: "The growth initiative of the federal government is going in the right direction." But it is decisive that the measures are now also implemented quickly to have an effect. "Now it comes down to actions following words."
- Despite the improvement in inflation, the upcoming Spring season does not seem to bring much optimism to the economy of Lower Saxony, as highlighted in the latest IHK survey.
- The prospect of the European Football Championship acting as a 'Summer Fairy Tale 2.0', stimulating consumption, has unfortunately remained a 'Summer Fairy Tale' itself, according to Maike Bielfeldt, CEO of the IHK in Hannover.
- The retail sector in Lower Saxony is facing challenges due to customer reticence and an order drought, with 46% of surveyed companies considering their order intake as too low.
- To improve the economic situation, Maike Bielfeldt has called for a clearly investment-friendly course, emphasizing the need for tax relief and bureaucracy reduction.
- Hannover, being the host city for the European Football Championship, might still benefit from the event, as the North German accommodation industry has reported satisfactory booking figures.
