German investors in Serbia sending positive signals for 2012

BusinessSouth-East European INDUSTRIAL Мarket - issue 2/2012

Annual survey on business environment done earlier this year by the Serbian-German Economic Association (DSW) among its membership shows that despite the difficult economic environment, 51% of surveyed companies are expecting increased business turnover, while 45% of them foresee profit increase in 2012. As many as 91% of interviewed companies said they would re-invest in Serbia, which is a respectable result compared to surveys in the region.

When evaluating the current state of their own companies, a total of 48% of respondents claimed it "Good", another 47% were confident that "Average" would be the right mark, while only 5% assessed it’s position poor. When it comes to their expectations on the development of their businesses in 2012 against last year, almost every second company (45%) expects a progress. A further 43% predicted unchanged business situation. Only the remaining 12% expected that their year’s economic position will be worse than the last year. Even though 75% of interviewed members of DSW posted higher turnovers in 2011 compared to the year before, 65% of respondents assess general economic situation in Serbia as poor. Clearly, the economic crisis did not affect their revenues and business profits. Also, forecasts for business turnover and operating profit for 2012 show optimism as 51% of companies expect an increase in business turnover, while 45% expect an increase in business profits. When it comes to new investment and job creation this year’s results surveys also show a positive development. The figures clearly show that German companies have confidence in Serbia: 41% of them have already increased investments in 2011, while 36% of them have such plans for 2012 coupled with increase in number of jobs.

Fight against corruption, transparency in public procurement, payment discipline, ensuring legal certainty and predictability of economic policy were assessed as points that need improvement while skilled workforce, academic education, productivity, availability of skilled labor and labor costs were seen as Serbia’s main strong points. Asked whether they would invest in Serbia again, as much as 91% of companies gave a positive response (in the last year’s poll this percentage was 79.4%). Thus, Serbia is again ranked high at the list of most popular investment destinations for German companies, on equal footing with, for example, Poland or the Czech Republic.

Summing up the results of this year’s survey, Michael Schmidt, Executive Director of the DSW and the Director of the Delegation of German Industry and Commerce in Serbia, said that "year 2011 was a good year for members of the Association, while the expectations for 2012 are marked with moderate optimism. Germany was the most important foreign trade partner of Serbia in 2011, while the trade balance between the two countries returned to the level before the global crisis.

Many firms want to continue investing to create jobs, expecting, at the same time, higher business turnover, higher profits and profit from exports, with energy, industry, infrastructure, healthcare, trade, food industry, ICT, tourism, financial sector and green technologies being assessed as most prosperous".

Source: SIEPA

Keywords: German, investors, Serbia, 2012