German companies satisfied with employees in Serbia but criticize slugish reforms – 92% of firms would pick our country again

Every year, German companies operating in Serbia are showing an increasing satisfaction with business in our country. Namely, a total of 92% of German companies would opt for our country as an investment location again, 38% are planning an investment increase while 47% of them are planning new hires. These are just a few indicators of the survey which the German-Serbian Association conducted among its members.

At the presentation held today, the German Ambassador in Serbia, Heinz Wilhelm, said that this year the fact that 92% of firms which want to invest again in Serbia a very good result.

- This is the best result of all the surveys conducted during the previous years. Last year, 88% of businesses responded positively so we think of this year’s result as a kind of a priori trust to the Government of Serbia. We support the fact that the future Prime Minister, Aleksandar Vucic, announced reforms in trade and adoption of 20 laws in June. The reforms should be carried out in the legislation and public administration. The lack of legal safety is a tremendous problem Serbia faces. The conversion of right of land usage into the ownership right is also one of the trouble spots – the Ambassador said.

Heinz Wilhelm said he is not aware of any German company which would downsize but on the contrary they want to hire new people. This mean s German companies believe in Serbia.

Germany is one of the crucial foreign trade partners. In 2013, goods exchange between Germany and Serbia totaled EUR 2,8 billion which is an increase of 11,7% compared to previous year.

As Martin Knapp, a director of the German-Serbian business association and the director of the Delegation of the German trade in Serbia pointed out, in 2013 the generated growth in exports from Serbia to Germany increased by 23,8%.

Martin Knapp, Ronald Seeliger, Heinz Wilhelm

- In Serbia, a total of 370 companies operate in Serbia hiring more than 25.000 people in our country. A significant number of companies have expanded their capacities in Serbia and they are announcing further investments in the upcoming period. A total of 97 companies took part in this survey which has been the biggest number so far – Knapp said.

Dr Ronald Seeliger, the President of the German-Serbian business association and the General Manager at Hemofarm, presented the results of the survey carried out in February this year.

- Businessmen were evaluating current economical situation in Serbia. The estimation, although not positive is better than the last year’s one. Certain progress has been made but it is still at the low level. As for this year, the result is more positive since 67% of those companies which took part in the survey expect unfavorable economic situation while 80% expected that last year- Seeliger said.

More than one third of the survey participants estimated their own economic situation as good, almost 60% as satisfying and only 4% as unfavorable. The German-Serbian businessmen see this year as a positive one, more than half of them expect an improvement of their economical situation while 40% of them forecasts stabile and unchanged situation of their companies. Only 6% forecasts worsen conditions in 2014 compared to the previous year.

Positive business development is expected when it comes to employment planning as well as to investment planning. Compared to the previous year, almost every third company expects headcount increase. A total of 45% forecasts unchanged situation in headcount number while only 8% counts on headcount decrease in their companies. A total of 38% of businesses wants to increase investments in the upcoming year while only 16% is planning the opposite.

Especially export-oriented production companies which are with more than 250 employees showed they are ready to invest and employ new people. A total of 71% of the surveyed counts on increase in headcount costs from 5% to 10%, while every fifth expects headcount cost increase of over 10%.

Just like in the previous years, during the estimation of the companies which took part in the survey on business conditions, lacks of legal security, predictability and economic policy and public administration efficiency are specifically underlined. Apart from that, it has been pointed out there is a lack of transparency in public tender and tax system as well as tax authorities.

When asked what the most important and most crucial measures of the Government of Serbia, majority of pointed out essential reforms of the Labor LaW, Anti-corruption Law, political stability and progress in business environment for foreign investors.

- Serbia is an investment location with its advantages. However, it is necessary to speed up some reforms. The Government of Serbia should adopt the Labor Law as soon as possible, it should improve the public administration efficiency, and it should speed up the process of construction permits issuance. We are asking from the Government to support us in investments and to work on the items we suggested - Ronald Seliger said.

Our labor market and employees were positively evaluated – qualification and staff motivation, their overall academic education, productivity, availability of qualified workforce while the labor costs were estimated as good.

Within the regional survey conducted in 16 states of the Central and Eastern Europe, poll participants had an opportunity to estimate positions of all other countries in the Central and Eastern Europe – Serbia ranks 12th out of total 20 countries.

S.O.