Economic recovery in the region remains sluggish and struggle-ridden
The economic landscape of the Osnabrück-Emsland-Grafschaft Bentheim region is showing signs of strain, with an increase in the number of companies deemed payment-in-default or at risk of insolvency. According to recent data, 374 companies have defaulted in the first half of the year, representing a default rate of 1.29 percent.
While some sectors, such as retail and manufacturing, are experiencing slightly better results, others like economic services and hospitality are facing more significant challenges. The default rate in the information and communication sector, for instance, is a positive 0.55 percent, while in the hospitality industry, it has risen to 2.75 percent.
The construction industry is another area of concern, with a rise in the default rate from 1.68 percent to 2.22 percent. This rise means that every fifth default in the region is affecting construction. Over 4,000 employees are affected by this critical development.
Retail continues to grapple with weak demand and higher prices at the checkout, although there is a slight recovery. The transport sector remains subdued, partly due to increased truck tolls.
Among the companies classified as defaults, those with up to four employees are most affected. This trend underscores the importance of supporting small businesses in the region.
However, there are some positive signs. The 'growth package' of the federal government can provide positive impulses, and the laws must be implemented quickly so that they take effect. An important signal is the extension and expansion of the degressive depreciation for investments.
Moreover, export expectations are on the rise due to a recovering global trade. This could offer a promising avenue for local businesses to expand and grow.
The IHK's economic climate index for the region is 83 points, up from 77 points in the previous quarter but still significantly below the long-term average of 102 points.
Economic stagnation can be attributed to a variety of factors, including economic structure, infrastructure and connectivity, demographic changes, investment and funding, regulatory environment, and education and training. To address these issues, regions often focus on diversifying their economy, improving infrastructure, promoting education and training aligned with modern industries, and fostering an environment that encourages innovation and entrepreneurship.
For specific insights into the Osnabrück-Emsland-Grafschaft Bentheim region, it would be beneficial to consult regional economic reports or local business development organizations. Frank Hesse, IHK Director of Economic Policy, explains that a strong foreign business or a recovering domestic demand have not served as a driving force for local companies. Instead, the economy continues to struggle, with businesses suffering from weak domestic demand and structural issues such as high energy and raw material costs, labor shortages, or bureaucratic burdens. The current business situation in the region is still assessed as poor.
- The manufacturing and retail industries, while not immune to challenges, are showing slightly better results compared to sectors like economic services and hospitality.
- The finance industry could play a critical role in supporting small businesses that are most affected among the companies classified as defaults.
- The transportation sector is subdued, partly due to increased truck tolls, which might have a substantial impact on businesses in this sector.
- To alleviate economic stagnation, efforts should be made to diversify the economy, improve infrastructure, and promote education and training aligned with modern industries, as well as fostering an environment that encourages innovation and entrepreneurship.
