Cool summer for the Saxon economy

By Annett Kschieschan

Dresden. Even though September and even the first few days of October showed their most beautiful late summer side - the mood in many Saxon companies has cooled down considerably. The ifo Business Climate Index, the barometer of sentiment for the Saxon economy, is falling. The companies surveyed were noticeably less satisfied in August than in the previous month.

Manufacturing sector looks abroad
A pessimistic mood prevails in the manufacturing sector, for example. The industrial companies surveyed are skeptical about the future. This is also because the management teams already assess the situation as considerably worse. "Due to high energy prices, export-oriented companies are increasingly thinking about investing abroad," says Thomas Schulz, authorized signatory of Creditreform in Dresden.

Service providers look to the future with concern
The business climate also cooled significantly in the Saxon service sector. Both the current situation and the coming months are assessed rather negatively by many Saxon service companies.

Business in the retail sector is better
A look at the retail sector gives us hope. Here, the mood brightened considerably in August. Business improved slightly in the wholesale sector and significantly in the retail sector. Accordingly, the outlook for the future is somewhat more optimistic. Adjusted for price, sales in the first half of 2023 were down in many retail sectors, such as food, DIY stores, stalls and sales at markets. In real terms, sales increased in textiles and clothing, sports goods and toys.

Continuing problems in the construction industry
In Saxony's main construction industry, however, there are concerns about the future. The companies surveyed recently rated their business situation as significantly worse and apparently do not expect any improvement in the near future. The effects are already being clearly felt. For example, around 4,000 construction companies in the Free State no longer pay their invoices on time and have to draw on supplier credit. "Three years ago, there were 2,800 construction companies that did not pay on time. In the first half of the year, the number of building permits also fell by 30 percent. Inflation, high construction and energy prices, and rising financing costs are slowing down investment," says Thomas Schulz. More and more companies are now looking for new follow-up contracts, he added. "Participation in public tenders is rising again and prices are starting to fall slightly due to low demand," the authorized signatory added.

More women in Saxony's executive suites
There is one positive piece of news in terms of women's participation in the labor force. Today, they are more frequently founding companies themselves or taking over existing businesses. This is shown by a study of the management and executive structure of medium-sized companies by Creditreform Wirtschaftsforschung. Currently, every fourth company in Saxony is managed by a woman. Nationwide, this concerns 22.8 percent of small and medium-sized businesses. In 2011, the figure was still 18.9 percent.
In general, the eastern German states are ahead in this respect. Between the Ore Mountains and the Baltic Sea, it was already a matter of course for women to be gainfully employed in GDR times. This tradition has led to the next generation taking it more for granted when it comes to having the courage to start a business. Looking at the individual sectors, a differentiated picture emerges. In the social and healthcare sector, the proportion of women in executive positions is 51 percent, in the service sector 47 percent and in education 37 percent. In the construction and IT sectors, on the other hand, only a few women sit in the executive chair - seven and 12.5 percent respectively.