Luxembourg business leaders concerned with economy

(CS) The majority of Luxembourg business leaders thinks it difficult to find skilled employers, with other location factors also in decline.

These findings are presented in the Luxembourg Business Compass study, for which 75 top decision makers were questioned online on their perception of business development under the euro and debt crisis.

For the first time since April 2009 expectations for Luxembourg business have taken a turn for the worse, with only 40% of respondents anticipating a positive economic development in the next sixth months. On average business leaders expect a stagnation of the economy.

Also perceived as declining is Luxembourg's competitiveness as a business location. While 50% believed it to be good in October 2010 only 29% continue to think so in October 2011, while the numbers of those thinking it is average or rather poor has significantly increased.

Several location factors play into this assessment. Especially the development of the cost of labour, abolishing of bureaucratic hurdles, the availability of a skilled work force and the social stability of Luxembourg society have seen a steep decline.

While the availability of skilled workers is seen as one of the major deciding factors for competitiveness of a country, 55% of respondents replied that it was difficult to find skilled staff and 28% even find it very difficult.

On the plus side, the promotion of Luxembourg as a business location is seen as improved by 36%.

Debt crisis has significant impact

n regards to individual businesses, the euro and debt crisis is seen as having a significant impact on the respondents' companies with 60% stating a somewhat negative effect. Similarly 40% see the volatility of stock markets as a serious or very serious problem.

Businesses in the finance sector report the biggest concerns in this area with 73% seeing stock markets as causing very serious or serious problems.

While 42% of companies state they have returned to pre-crisis levels from 2008 an increasing number (21%) say it will take longer than two years to achieve this, up by 11% from April 2011.

In accordance with this data 52% have already implemented cost cutting measures or are currently doing so, with a significant number saying it is somewhat likely they will do so in the future. Budgets are therefore also more tentative, with few increases in spending planned.

Current politico-economic questions were also addressed in the study with around a third of respondents speaking out against a financial transaction tax, while 61% would support it only if it were introduced globally.

Furthermore the majority of entrepreneurs thinking the crisis tax should be abolished at the start of next year as planned, as well as 49% thinking the next wage indexation should not take place until 2013.

The businesses chosen to be represented in the study are selected along their share in Luxembourg's GDP as well as the number of employees. The 75 candidates taking part in the poll were either company owners, CEOs/CFOs and COOs, or employed in other leading functions.