Economic survey: Saxony's economy is treading water

According to the Chambers of Industry and Commerce (IHK), the Saxon economy is treading water. The chambers referred to the results of a recent economic survey in which a good 1,630 companies with around 87,200 employees were questioned in September. According to the survey, the business situation hardly changed due to persistently weak demand and high costs. A slight decline in economic output is expected for the current year.

Industry suffers from energy costs and competition from China

"The business situation in industry has deteriorated again compared to the spring. The competitiveness of industrial companies is suffering due to higher energy costs and increased competition, particularly from China," it said. A good half of the companies reported a fall in turnover. Incoming orders had also decreased. Domestic demand is now the most significant business risk for 72 percent of companies. A third of the companies surveyed expect the business situation to deteriorate further, according to the chambers.

Despite the stable business situation, the situation in the construction industry remains tense. "The backlog of orders from recent years has been worked off and the persistent weakness in demand is continuing, particularly in building construction. The sharp decline in building permits is a symptom of a nationwide construction slump."

Services sector assesses the situation best

The services sector once again achieved the highest score in the assessment of the situation, the report continued. 88 percent of the companies surveyed reported good or satisfactory business here. Nevertheless, service providers were also affected by the slump in consumption and problems in industry: 28% reported a fall in incoming orders. Forecasts are weakening, with just under a quarter of companies expecting further setbacks.

Almost all retailers cite cautious customer purchasing behavior

According to the survey, the situation in the retail sector has worsened. "The real wage increases have not yet been reflected in an increased buying mood. The vast majority of retailers (96%) describe customers' purchasing behavior as cautious."

Upward trend in the hospitality and tourism industry

The chambers are registering an upward trend in the hospitality and tourism industry. "Thanks to good business in the summer months, turnover and earnings have improved noticeably. Eight out of ten businesses are making a profit or at least covering their costs." However, expectations are negative. The staff situation also remains tense: Just under a fifth of companies expect staff numbers to fall.

According to the survey, 28 percent of companies have reduced their workforce in recent months. At the same time, 45 percent stated that they would not be able to fill vacancies in the long term. Companies see the greatest potential for improvement in combating the shortage of skilled workers in reducing bureaucracy.