Economic report: Poor mood in Lusatia

The hope for an economic upturn in Lusatia has not yet been fulfilled, according to a survey by the Chambers of Industry and Commerce (IHK). After a noticeable improvement in the spring, the business situation in Lusatia in Brandenburg and Saxony deteriorated again in the fall, according to the Cottbus and Dresden Chambers of Industry and Commerce. More than 600 companies from the industry, construction, services, trade and hospitality sectors in the districts of Görlitz, Bautzen, Oberspreewald-Lausitz, Elbe-Elster and Spree-Neisse as well as the city of Cottbus were surveyed for the analysis.

Development varies in individual economic sectors

"27 percent of companies describe their situation as good. This contrasts with 22 percent who state that the situation is poor. The balance slipped from eleven points in spring to five points and is therefore also three points below the comparative value from fall 2024," it said. There are no signs of an economic turnaround in the results. However, developments in the individual economic sectors would vary.

Worries for industry, trade and services

"We are worried about industry, trade and service providers. Their assessments of the situation have mainly contributed to the slippage in the situation balance," explained Lukas Rohleder, Managing Director of the Dresden Chamber of Industry and Commerce. Weak domestic demand, difficult export conditions and bureaucratic hurdles slowed down business in the industry. The retail sector is still struggling with buyer restraint. Company-related service providers are paralyzed by the weak economy in other sectors.

Only 10 percent believe the situation will improve

"The fact that the overall assessment is not even weaker is thanks to the positive voices that are increasing in the construction and hospitality industries," said Rohleder. Business expectations remained subdued. Only 10 percent of those surveyed expected their situation to improve, while more than three times as many (34 percent) anticipated a further deterioration. A turnaround is not in sight. In industry, trade and services, expectations would increase slightly at a low level compared to spring, but would fall significantly in the construction and hospitality industries.

Companies anticipate falling turnover

According to the survey, turnover is expected to fall across all sectors. The Lusatian economy remains very reluctant to invest. Around half of companies (49 percent) are currently not investing at all, it said. Increasing (18 percent) and decreasing investment plans (14 percent) were almost in balance. "The economy lacks planning security and economic policy impetus. The main risks for companies are energy and raw material prices (67%), high labor costs (65%) and the economic policy framework (61%)". This was followed by a shortage of skilled workers (51%) and domestic demand (45%).

Skills shortage rated less dramatically

"Although the current risk assessment rates the shortage of labor and skilled workers less dramatically than in previous years, it remains a key obstacle to economic development in Lusatia," emphasized André Fritsche, Managing Director of the Cottbus Chamber of Industry and Commerce. Two thirds of companies expect this to place a greater burden on their workforce. Just as many expect labor costs to rise - also due to the agreed increase in the minimum wage, which will directly affect 31 percent of the companies surveyed.