Carried out from 14 September to 2 October among 560 companies, the barometer score increased ever so slightly to 45,7/100 in the second half of the year compared to 61,9/100 this time last year. Calculated from different economic indicators--such as jobs, investments and confidence--the barometer had drastically dropped to 45,6/100 during the first half of 2020.

Over half of the companies surveyed indicated a decrease in activity over the last six months and over one third thought that the situation will not improve during the first half of 2021. 

These statistics are reflective of the current state of Luxembourg’s economic tissue in the wake of a second wave of covid-19 infections and the resulting European-wide reimplementation of restrictions, the Chamber of Commerce said.

Some sectors more affected than others

Whereas during the first half of the year the financial sector was still experiencing a rather positive period, it is now going through a more difficult time, similar to most other pillars of the economy, the report found.

Over eight out of ten businesses in Luxembourg’s hospitality sector have seen their activity decrease. Leaders of the HORECA sector therefore remain rather pessimistic regarding activity, investments, return and the evolution of employment over the next six months. 

Along the same lines and equally affected by the crisis are sectors of transport, trade and construction, where over six out of ten businesses indicated a drop in activity. 

Cost of labour new challenge for development

Whereas in previous editions of the barometer the lack of skilled labour has occupied the pole position when companies were asked about challenges of economic development of businesses, the cost of labour has now taken the top spot in this regard. 

With a future unknown and no end to the current health crisis in sight, it remains to be seen whether the next edition of the Chamber's barometer, in the first half of 2021, will be able to offer a more optimistic outlook.