• The level of appreciation of the investment climate reaches a new positive record (51%), and intentions to increase operations and investment plans in 2023 are still at high levels.
• Economic results for 2022 were higher than estimates on all levels: revenues, number of employees, and investments.
• Romania has not generated new competitive advantages, and the disadvantages are deep in the absence of targeted reforms and measures.
• The tension in the labor market remains at record levels, for 94% of companies it is difficult to find specialists in the sectors in which they operate.

Bucharest, July 4, 2023: AmCham Romania presented the results of the fifth edition of its annual survey on the quality of the investment climate, which indicates higher optimism compared to previous editions regarding Romania's economic potential, confirmed by consistent investment intentions for the next 12 months and expansion plans during the next 3 years.

For the overall investment climate, the good and very good rating was given in the 2023 edition by 51% of companies taking the survey, compared to 39% last year, higher than the pre-pandemic perception, in 2019. The high level of optimism can indicate that the pressing impact of the multiple crises manifested in recent years is beginning to fade, but also confidence in Romania's development opportunities.

The higher confidence is also based on the business results of 2022, better in all analyzed chapters compared to the anticipated level: revenues (67%), number of employees (51%), and investments (55%). Companies maintain an optimistic outlook, anticipating similar performance across all three tiers for the current year, which indicates maturity and resilience built by overcoming the challenges and uncertainty of recent years.

"AmCham members believe in Romania. Their optimism is at an all-time high, the investment outlook is promising, and so are the expected medium and short-term results - this is the best message we could send from our community in the year we celebrate 30 years of AmCham in Romania. The greatest expectations of the business environment are aimed at measures with a high-gearing effect on the economy, such as infrastructure investments, the absorption and use of European funding, the acceleration of the digitization of public services, and the maintenance of a predictable and competitive fiscal-budgetary framework. These are even more important as they are essential for Romania's strategic priorities such as joining the OECD, implementing the NRRP, or strengthening the economic partnership with the USA" said Cristian Sporiș, President of AmCham Romania".

In terms of the most valued market conditions, the quality of digital infrastructure ranks first for the fifth consecutive year, increasing from 49% in 2022 to 57%, followed by the quality of human capital, which 47% of respondents find good & very good.

On the opposite end, the top of least valued market conditions is determined by the poor & poor ratings given to each of the top five by the majority of companies participating in the survey. With 84%, the quality of transport infrastructure outranks debureaucratization in this year's edition, which ranks 2nd with 74%. This is followed by the quality of the health infrastructure (68%), the energy price (65%), and the predictability of the investment framework (62%).

Regarding the competitive advantages that remain relevant for Romania in the post-pandemic period and in the current regional geopolitical context, EU membership continues to be in first place (82%), followed by NATO membership (60%). The other competitive advantages included in the survey were appreciated compared to the level of 2022 as follows: the quality of human capital (53% versus 42%), and the competitive level of corporate taxation (33% versus 31%). The quality of digital infrastructure remained relatively the same (28% vs. 29%).

"This high record level of optimism is doubled by vigilance and caution, as was to be expected after a period of multiple crises. For this optimism to turn into economic growth, it is necessary to strengthen the market conditions sought and appreciated by investors, and at the same time to identify, assume and develop additional competitive advantages, relevant to the new economic models centered on sustainability, green transition, and digital transformation. The security highly valued by investors is ensured by EU and NATO membership, but our goal should be for advantages deriving from economic and social policy, such as the quality and availability of human capital or fiscal policy, to be the core of Romania's investment offer " said Elisabeta Moraru, Vice-President of AmCham Romania.

In terms of financing, own funds are still among the sources that most companies turn to (86%), followed by bank loans, which register a significant increase this year, from 35% in 2022 to 65% in 2023. Shareholder loans also increased, from 29% in 2022 to 65% this year. European funds, new in this year's edition, are an option for 39% of respondents. Accessing financing from the capital and private equity markets maintains positive trends, each recording almost double weights compared to last year.

"To achieve their investment plans, companies rely on a mix of financing sources. As 66% of companies foresee an increase in financing costs, we believe that their impact can be mitigated by making the most of the available European funds and by increasing financing through the capital market. For this, an increase in the absorption capacity of European funding is needed, both of NPRR or operational programs funding, so that companies can participate in the implementation of strategic projects. The efficiency of the national framework for accessing and using European funding will also contribute to a healthier structure of the state budget, to finance the deficit, one of the macroeconomic risks that generate the greatest concern for the business community" pointed out Andrei Andreescu, Vice-President of AmCham Romania.

In terms of concerns, by far the strongest is generated by the tension in the labor market, which is reaching a breaking point, given that 94% of the companies participating in the survey have difficulties in finding suitable employees. The structural problems in the labor market caused by the negative demographic evolution, migration, disparities between regions, between rural and urban, and the poor quality and inadequacy of the education system, have become more acute, and have a heavy impact in the most developed regions, which accumulate approximately 70% of the labor shortage, according to an AmCham analysis conducted by PwC.

"The crisis of qualified personnel and not only, represents the biggest limitation of Romania's capacity to reach its full growth potential in the short, medium, and long term. Along with public policies that address systemic problems, and that will produce effects over time, urgent measures are required to at least partially ensure the labor force needed in the economy. Many European states facing similar challenges are making efforts to integrate young people and the inactive population into the labor market, are looking to capitalize on the segment of the population that has the necessary skills in the labor market and have increased their administrative capacity to absorb non-EU workers.  Such measures are equally necessary, feasible, and urgent for Romania as well", said Alexander Milcev, Member of the Board of Directors of AmCham Romania.

AmCham members’ assessment in the 2023 edition of the AmCham Business Barometer, both in terms of sources of optimism and of concern, are all the more important as 2023 is a pre-election year and any measures disconnected from the economic reality could generate costly imbalances for Romania.

In this context, AmCham Romania will continue to promote a constructive and substantive dialogue on priorities for the economic agenda, contributing with public policy recommendations and measures aimed at strengthening Romania's economic competitiveness.

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About the 2023 AmCham Business Barometer

• 215 (40%) of the total of 530 AmCham Romania member companies, at CEO or CFO level.

Of these, according to the ANAF classification

• 48% - large contributors
• 32% - medium contributors
• 20% - small contributors

Survey period: May 2023