The Foreign Investors Council published the Business Sentiment Index (BSI) results for the latest edition, spring 2022. The survey shows that there is a moderate optimism among investors, however it is impacted by uncertainty and current challenges such as: energy market crisis, military conflict in Ukraine, inflationary pressures affecting supply chains and customer demand, including the erosion of end–user disposable income, which possible effects were highlighted in the May edition of the Inflation Report published by the National Bank of Romania (NBR).
Companies want to invest in Romania, half of the respondents estimate that for this year the planned investments are at similar levels to last year, and 40% of respondents say they plan to invest larger amounts compared to the previous period. NBR reported foreign direct investments worth 7 billion euros for 2021 – representing the highest values for foreign investments.
Over 50% of the respondents have plans to expand their workforce and 37% keep these plans for the next 12 months at levels similar to last year. The sentiment remains that there is a need for labor, but unfortunately the perception of the availability of adequate staff remains reserved, only 45% of respondents believe that labor force is competitive. The results also capture the tendency for hybrid work, with 45% of companies estimating that more than a quarter of their employees will continue to work from home.
The trend remains constant with previous editions with poor results when it comes to infrastructure, transparency and coherence in the application of public policies, reducing bureaucracy and the burden of regulations. 65% of respondents to the spring 2022 edition believe that these areas remain uncompetitive and that reforms are needed to close the gap between Romania and other European countries. PNRR and the operational programs represent an opportunity to support and implement the needed reforms through EU funds allocation.
At the same time, the latest edition of BSI highlights other measures that could increase investor confidence, such as qualitative dialogue with investors and consultation with the business environment following the model of the Forum on investments organized by FIC in partnership with the Romanian Government. Creating clear strategies for priority investments and being proactive with potential investors through an investment promotion agency could also make it easier to attract private investments.
The full results of the FIC Business Sentiment Index, spring 2022 edition can be found here.