Sentiments of German companies in the Philippines over the recovery of the local economy turned unenthusiastic due to the persisting effect of the pandemic.
Results of the AHK World Business Outlook Survey — Spring 2021 released yesterday showed investment, employment and recovery expectations of German firms are down, citing lesser demand, economic policy and financing as the greatest threats to their operations at 64 percent, 55 percent and 44 percent, respectively,
The survey was participated in by 66 companies done between March and April 2021 just when a new surge of new coronavirus 2019 (COVID-19) cases was noted,.
Only one out of 10 companies expects economic recovery this year compared with AHK’s fall survey six months ago when the number was three times higher.
The risks and concerns are still the same as when the pandemic started: travel restrictions worldwide.
“Companies feel the negative economic effects of the COVID-19 surge in the first quarter, and they are unsure about the economic development,” said GPCCI president Stefan Schmitz.
The survey showed companies are less optimistic than six months ago when it comes to the country’s medium-term economic development: The number of companies forecasting a better situation almost halves to 15 percent, while the anticipation of a deteriorating local economic development grows to 40 percent, up five percentage points (pp).
In the corporate front, almost every second participating company expects little to no changes when it comes to local investments within the next 12 month and only one in seven plan higher investments.
More than half of the participants (56 percent) expect their workforce to stay stable, only 15 percent plan a growing workforce (-12 pp) and only 9 percent of the participants forecast a full recovery until 2021 (down from 32 percent).
Four out of five companies still list travel restrictions as the most negative effect of the pandemic while problems related to supply chain and logistics were cited by 48 percent of respondents, an increase of 5 pp from the fall survey.
