A Chamber of Commerce survey of some 621 companies conducted after the start of the Iran war shows that firms' confidence in Luxembourg's economy is under pressure and that reforms are being held up. Although 58% still remain confident in their outlook for the country's economy, the score has never been so low since the survey began in early 2019.
The results vary from one sector to the next, and even within sectors. The financial sector remains the most upbeat, at 75%. In hospitality, only 33% of firms report confidence in the outlook. In industry, retail and construction, the figure barely reaches half.
For Chamber of Commerce director Carlo Thelen, the picture is no surprise given the conflict in the Middle East. In his view, however, the results also confirm that structural reforms are needed.
According to the findings, companies are still waiting for administrative simplification. On the more positive side, access to credit has improved once again. Attracting and holding on to staff remains a major challenge.
The hardest part, businesses say, is finding the right profiles, with candidates often demanding a level of flexibility that firms cannot always accommodate, while one third of companies pointed to competition from the public sector as an added strain.
Expensive housing is the biggest obstacle to bringing new people into the country, particularly less highly qualified workers. The survey also shows that 70% of companies are unaware of the tax measures already available to attract staff and retain them.
