The IHK Heilbronn-Franken Economic Survey Reveals Worsening Mood and Bleak Prospects

The mood in the regional economy is getting worse and the prospects are bleak. This is shown by the current economic survey by the IHK Heilbronn-Franken for the third quarter of 2023. The possible negative effects of the war in the Middle East are not yet taken into account.

Companies in the region: No turnaround seen

“We can’t see any signs of a general turnaround in the third quarter of this year either,” said IHK general manager Elke Döring when presenting the survey on Tuesday in the Heilbronn Haus der Wirtschaft. Companies in the region are deeply unsettled and are missing a clear and reliable economic policy agenda from the traffic light government in Berlin. “A clear signal of optimism is expected to turn the corner,” said Döring, summing up the mood in companies.

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The current situation is still good overall

The current situation in the regional economy is still quite good despite the numerous negative influences. In the survey, 28.6 percent of companies stated that their business was going well, and 56.5 percent spoke of a satisfactory business situation. 14.9 percent of companies described their situation as bad, compared to 11.9 percent in July.

Expectations have deteriorated significantly. Only 12.9 percent (previous quarter: 16.4 percent) expect business to improve in the next few months, while 55.2 percent expect the business to remain the same. Almost every third entrepreneur (31.9 percent) expects worse business; in July it was 26.6 percent.

Companies are hiring fewer staff

Elke Döring is particularly worried that companies’ willingness to hire is declining sharply and has fallen to the level at the beginning of 2021. Only 13 percent of companies want to hire additional employees, while 21 percent want to reduce their workforce.

“The situation is serious,” said Döring and appealed to politicians to take companies’ concerns seriously. “Business expectations are bleak across all sectors,” emphasized the IHK general manager.

Industry is no longer a driving force for the time being

This also applies to industry as the economic driving force of the Heilbronn-Franconia region. Almost 30 percent of the companies surveyed expect worse business performance in the coming months – only 10.8 percent expect better business. The main reason for the widespread pessimism is the slump in orders: both at home and abroad, industrial companies have had to accept significant declines in some cases. As a result, 36 percent of companies stated that they would reduce their domestic investments, and 23 percent wanted to cut staff.

Döring’s tip for politicians: debate less, do more.

Elke Döring sees “no light at the end of the tunnel” for the coming months. However, she hopes for the tried and tested resilience of regional companies that are financially well positioned. Döring has the following advice for politicians: “Debate less, do more.”

Regional craftsmen are also worried

There are also great concerns about economic development in the regional trade sector. The general downward trend in the Heilbronn-Franken Chamber of Crafts survey did not continue in the third quarter. But companies are suffering from a significant decline in orders, especially in the construction and finishing trades. 37 percent of tradesmen reported a decline, only 12.8 percent recently recorded more orders. There were also declines in sales and employment.