Economic crisis in Mecklenburg-Western Pomerania: entrepreneurs are desperate!

Economic crisis in Mecklenburg-Western Pomerania: entrepreneurs are desperate!

The economic situation in eastern Mecklenburg-Western Pomerania remains tense and shows no signs of improvement. These sobering findings were published by IHK Neubrandenburg as part of their current economic survey, in which 362 companies from various industries took part. Despite the past few months, which were often characterized by hopes of improvement, the economic climate has stagnated at an index level of 97 points and is significantly lower than the ten-year average of 110 points. The mood among entrepreneurs is generally bad to pessimistic.

What's particularly alarming is that 68 percent of business owners see rising labor costs as the biggest risk to their business. This number has increased by five percentage points compared to the last survey. A key factor is the planned increase in the minimum wage to 13.90 euros at the turn of the year, which means a significant additional burden for many companies. Only 6 percent of companies are thinking about hiring new employees, while 28 percent expect a reduction in their workforce.

Challenges for companies

Entrepreneurs see high bureaucracy and unfavorable economic policy conditions as the second largest problem. Energy disruptions and rising raw material prices are perceived as the third major risk by 57 percent of companies. These factors mean that only 15 percent of companies plan to increase their investment budget, while 42 percent plan to make cuts. Almost half of the companies do not intend to make any significant investments or plan to spend a maximum of 10,000 euros, mainly on replacement purchases.

Business conditions, particularly in industry, are negative for the first time in a decade, reflecting high labor costs and weak domestic demand. The construction industry is also showing stability, but is struggling with a significant shortage of skilled workers. The commercial sector, particularly wholesale, is suffering from weak demand, while retail is facing rising labor costs. For the transport industry, however, the situation looks somewhat better, although it also suffers from high costs and a shortage of skilled workers. The hospitality industry is severely affected: rising wage and energy costs are leading to a decline in investments.

Political demands and perspectives

Torsten Haasch, general manager of the IHK, is calling for urgent action from politicians. This includes reducing reform backlogs and reducing non-wage labor costs to below 40 percent. He points out that without these steps, a recovery of the economic situation in the region is not in sight. There is also a growing desire to use special funds to support the regional economy. In connection with the discussion about the minimum wage, it becomes clear how much pressure this puts on companies.

The Minimum Wage Commission had recently decided to set the minimum wage at 13.90 euros for 2026 and 14.60 euros for 2027. This remained well below the target of 15 euros in the federal government's coalition agreement. There are many myths in the public debate about the impact of a higher minimum wage, while studies show that employment has grown and unemployment has fallen since the minimum wage was introduced in 2015. A higher minimum wage would strengthen the low-wage sector in particular and reduce fluctuation, which would be an advantage for many companies.

Overall, it is clear that companies in Mecklenburg-Western Pomerania urgently need political support in order to overcome the economic challenges. The concerns and fears of entrepreneurs must be taken seriously so that they can not only survive but also prosper.