FrankfurtRheinMain 2023 employment and economic forecasts
The effects of energy policy in Germany, exacerbated by the Russian war of aggression on Ukraine and by inflation, are weighing on regional businesses and clouding the prospects for the coming months. The hope for a post-corona recovery did not materialize this year due to the war. “29% of companies rate their current business situation as good. Conversely, only 19% rate the current business situation as negative. However, a look at the next twelve months makes you think: more than half of the companies expect a worsening of the business situation”, comments Ulrich Caspar, President of the Chamber of Industry and Commerce of Frankfurt am Main and spokesperson for PERFORM, the initiative of the economic chambers of the FrankfurtRheinMain metropolitan region the results of the employment and economic forecasts for FrankfurtRheinMain.
The regional chambers of commerce forecast a growth of the gross domestic product of 1.3% in the current year. Declining momentum in the second half of the year and pessimistic valuations of many companies are clouding the outlook for next year. Against this background, the PERFORM chambers expect gross domestic product in Frankfurt am Main to decline by two percent in 2023. Even sectors such as industry and construction, which acted as anchors of stability during the pandemic, are now showing a strong impact.
High energy costs pose an existential threat to many businesses
“High energy costs pose an existential threat to many businesses, especially energy-intensive sectors are suffering from current prices. As a result, investments are postponed, production is stopped or even relocated abroad. The international competitiveness of companies is overall in danger. Furthermore, high prices are having a negative impact on consumer behaviour,” Caspar explains.
At the same time, the consequences of the Russian war of aggression in Ukraine are slowing down the growth dynamics of the labor market in the metropolitan region. For 2022, an increase of almost 38,000 jobs subject to social security contributions (up 1.5 percent) is expected. For 2023, the regional chambers of commerce expect only a slight growth of around 7,100 employees subject to social security contributions or 0.3 percent. “The labor market, which has already been challenged by the crisis from the pandemic, can largely cushion the current challenges and the need for skilled workers remains high in many sectors. A decline in employment in the metropolitan region is therefore not foreseeable,” comments Caspar.
The risks to the further development of the business situation of the companies are still classified as high. In the context of uncertainties, which mainly concern the progress of the war in Ukraine, energy and raw material prices represent by far the greatest risk to business development for 76 percent of companies, who see the second challenge in one cause by the high inflation triggered by the drop in domestic demand (55 percent). The shortage of skilled workers, with 53 percent in third place of risks, remains a structural problem. “Due to insufficient land designation, it is not possible to create the urgently needed mobile apartments to accommodate the missing workers,” continues Caspar.
“The regional economy has rarely been challenged. Relief packages and gas-price brakes are not designed to be effective. They are only a temporary response to the symptoms of the crisis and have a profound impact on market processes. However, good economic policy should fundamentally shape the framework conditions for successful economic activity and accelerate the transformation process through incentives. This is the only way in which the FrankfurtRheinMain business location can continue to remain attractive for companies and skilled workers nationally and internationally,” concludes Caspar.
The complete FrankfurtRheinMain 2023 employment and economic forecast is available for download on the Internet at www.frankfurt-main.ihk.de/prognose.
About PERFORM
“PERFORM Zukunftsregion FrankfurtRheinMain” is an initiative of the economic chambers of the FrankfurtRheinMain metropolitan region. PERFORM members are IHK Frankfurt am Main, IHK Darmstadt Rhein Main Neckar, the Chamber of Crafts Frankfurt-Rhein-Main, IHK Aschaffenburg, IHK for Rheinhessen, IHK Gießen-Friedberg, IHK Limburg and IHK Wiesbaden. Under the umbrella of PERFORM, the chambers of commerce address pressing issues of the regional economy and work on joint projects, for example on digitalisation, spatial development, skilled worker development, start-ups, innovation, as well as mobility and transport. The initiative was launched in 2016 and transformed into a civil law company (GbR) in 2020. PERFORM is in close contact with other partners in the region, such as the transnational strategic forum FrankfurtRheinMain.
More information on the website and on Facebook and Twitter:
www.perform-frankfurtrheinmain.de
www.facebook.com/PerformFrankfurtRheinMain
https://twitter.com/PerformFRM
(Text: PM IHK Frankfurt am Main)
