A survey by the German-Croatian Chamber of Industry and Commerce (AHK) has shown that more than 80 percent of companies are willing to invest in Croatia again, with high energy prices and a shortage of skilled labor cited as the biggest challenges for entrepreneurs, it was highlighted on Friday during the presentation of the survey at AHK.
This year’s economic survey by AHK was conducted from February 25 to April 26 in 16 countries in Central and Eastern Europe, involving a total of 983 companies. In Croatia, a total of 105 domestic and foreign companies participated in the survey.
– A large number of companies, 84 percent, would choose Croatia as an investment location again, which AHK, as the largest bilateral economic organization in Croatia, particularly advocates for – emphasized AHK President Thomas Sichla. This survey result is almost at the same level as in 2021, but represents a 30 percent increase compared to the pre-pandemic year of 2019.
When it comes to business risks, high energy prices are at the top, which is certainly due to the crisis in Ukraine and the energy shocks it has caused in the global and European markets, Sichla said.
More than half of the respondents, 53 percent, rate the current economic situation in Croatia as satisfactory, which is a 10 percent increase compared to the previous year, while 21 percent consider the situation to be good.
One third of respondents believe that the economic situation in Croatia is better compared to 2021, and when it comes to the perception of the economic situation, countries in Central and Eastern Europe (CEE) rate the economic situation almost at the same percentage as the participants in the survey in Croatia.
Almost 97 percent of entrepreneurs are optimistic
The survey also showed that entrepreneurs are optimistic when it comes to business in their companies. Despite the consequences of the COVID-19 pandemic on the economy, respondents positively assessed the current business situation in their own companies. Thus, nearly 97 percent rated their business as good or satisfactory (with 51 percent satisfactory and 46 percent good).
The share of companies that rate their current business situation as good or satisfactory has increased by almost 10 percent compared to 2021.
Expectations for 2022 compared to the previous year are also positive – more than half of the respondents believe that there will be an improvement in business in their company, while only 10 percent believe that business will worsen.
This year’s survey also included business expectations of entrepreneurs related to the war in Ukraine and the economic shocks it has caused.
Short-term economic consequences are reflected in higher energy prices, raw materials, and materials (almost 80 percent of respondents), disruptions in supply chains and logistics (56 percent), shortages of raw materials and materials (37 percent), a decline in the number of orders for certain products (25 percent), a decline in production and loss of business partners (20 percent), etc.
When asked when entrepreneurs expect the normalization of international supply chains, 45 percent predict normalization only in 2023, while 20 percent believe that results will not be achieved in the foreseeable future before the corona crisis.
The greatest advantages, disadvantages, and risks
As the five greatest advantages of Croatia as a business location, companies highlighted EU membership, the adequacy of higher education, the qualification of employees, infrastructure, productivity, and employee motivation, which has not changed compared to the previous year.
As disadvantages and the biggest challenges, companies note insufficient fight against corruption, tax burdens, the tax system, lack of transparency in public procurement, and public administration.
According to the survey, 35 percent of respondents rated the work of the current Croatian government as satisfactory, while almost 40 percent consider it poor.
As the biggest risks in business, respondents cited energy prices, a shortage of qualified labor, raw material prices, labor costs, and demand.
Given that the shortage of qualified labor is characterized as the second biggest risk factor in business (43 percent of respondents), when asked what measures employers plan to take in this regard, nearly 50 percent plan to do so through employee education, 39 percent plan to raise wages, and the third place mentions increasing automation and digitalization.
