Economic debacle in Saxony-Anhalt: medium-sized businesses are in crisis!

Economic debacle in Saxony-Anhalt: medium-sized businesses are in crisis!

In Saxony-Anhalt, the economic downturn remains stubborn, as shown by the latest survey data from Creditreform and the Leibniz Institute for Economic Research Halle (IWH). According to a survey in which 410 companies took part, only 49.5 percent of companies rated the situation as “very good” or “good” – a small decrease compared to the previous year, when it was 51 percent. On the other hand, 9.4 percent of those surveyed classified the business situation as “poor” or “unsatisfactory”. Martin Plath, Managing Director of Creditreform, points to a recession that has been going on for two years and speaks of a necessary, but not yet in sight, economic turnaround.

The pressure on the industry is immense. Companies are suffering from dwindling demand, geopolitical uncertainties and rising costs. 30.7 percent of those surveyed reported a decline in sales, while only 23.6 percent were able to record a sales gain. This development is particularly evident in the retail and service sectors, where the weakness in private consumption is noticeable. The situation is primarily due to the shift in distribution channels to online business, which is putting a heavy burden on stationary retail in Saxony-Anhalt, as Axel Lindner from the IWH emphasizes.

Difficult business expectations

Another dampener is the pessimistic business expectations of medium-sized companies. Only 20.9 percent expect sales to increase in the near future, while 25.7 percent expect financial declines. These uncertainties mean that the willingness to invest among medium-sized companies is below the average of the last ten years: only 46.6 percent are planning investments, in 2024 it was still 52.3 percent. It looks like many companies have pulled the ripcord and are planning to leave their workforce unchanged. 75.9 percent of companies do not want to create new jobs, while 23.2 percent report a decrease in the number of employees, and only 19.1 percent have increased the workforce.

The declines are not just limited to trading; All sectors of the economy are affected, with the exception of the service sector. Also worrying is the increase in companies with a low equity ratio, which rose from 25.5 percent to 28.1 percent. In addition, 10.3 percent of companies fear that they will not be able to meet their financial obligations. Martin Plath points out that legal requirements are also putting pressure on companies. Over 77 percent of those surveyed reported increased legal requirements and an increased burden of bureaucracy.

Bureaucracy and cost pressure

At minus 12.2 points, the IHK business climate index figures from the end of 2024 show that the situation remains tense. High energy and wage costs place additional strain on companies. The presidents of the IHK Halle-Dessau and the IHK Magdeburg unanimously call for a federal government reform agenda to combat cost disadvantages, with a clear focus on reducing energy prices and digitizing administrative processes. After all, companies spend a fifth of their working time on bureaucratic requirements, which significantly limits competitiveness.

In summary, the current situation in Saxony-Anhalt shows that medium-sized businesses are still going backwards. The challenges of recent years have not yet been overcome and there is no economic improvement in sight. The potential for change lies in the hands of politicians, who must act urgently now.

Further details can be found in the posts by dubisthalle.de, nachrichten-heute.net and hallespektrum.de.