Company News

Hopes remain high amidst economic slowdown

D

More than 42% of respondents expect an improvement of their business situation in the next six to 12 months, mainly due to a stable demand on both domestic and foreign markets. More than a third of the respondents rated the current domestic demand as 'good' while the same is true for 30% of the respondents with regards to demand from abroad.

Over half of the companies rating demand for their products as 'good'are intending to capitalise on the good initial position and increase their domestic production volume. Further, 44% of the panel members expect to be able to increase their export volume in the next 12 months. Slightly less are assuming a constant export volume and only 6% are anticipating a decline. More than two-third of the companies looking to increase their export volume also expect an improvement of their business situation in the upcoming twelve months.

In terms of raw material costs, over 60% of the companies believe that prices for raw materials and preliminary products will rise in the next 12 months. Especially countries in Eastern Europe are expecting rising prices. Here, more than 70% of interviewees are anticipating an increase. Additional costs generated by price increases in raw materials and preliminary products are passed on to consumers by the companies. Over 70% of panel members stated to intend to shift additional costs to the consumer by increasing own prices. With a significant gap follow the change of suppliers for 24.5% and reduction in storage for 17.7% of participants as possible solutions.

Another factor to ensure stability for future developments is investments undertaken by the companies. A large number of companies have executed investment in the past. Further investment, especially in expansion, replacement and renewal, are envisaged. Often, investments are also made in areas such as innovation of products and processes, marketing and sales as well as personnel. Investment in sustainability and IT-systems is only planned by 17.1% and 15.9% of panel members respectively.

Concerning their strategic planning, companies mainly utilize information provided by external market research institutions, while only every fifth company relies on business consultancies. External information is mainly used for development of new products and competitor analysis in the market. Around two-thirds of the companies that obtain their information from market research agencies also rate their current business situation as 'good'. This ratio is even more significant regarding the expectations. More than 70% of the companies utilising external market research institutions are expecting an improvement of their business situation during the upcoming six to 12 months.