Carried out this spring, the AHK's annual business survey also specifically examined the economic consequences of Russia's ongoing war in Ukraine this year. The results indicate that companies operating in the Baltics are seeing both short- and long-term consequences of the war for their business, according to a press release.

At the top of the list of Baltic businesses' concerns in the short term are higher energy and raw materials costs, which was cited as a major risk by 67 percent of companies surveyed in Estonia, 77 percent in Latvia and 54 percent in Lithuania. 40 percent of Estonian companies also said they were aware of disruptions in the supply chain and logistics.

One third of Estonian companies surveyed cited changes in transport routes as a long-term consequence of Russia's war in Ukraine, and nearly the same number of Estonian companies find that, in the long term, the war will end or limit business relations with certain regions, and that there will be greater diversification of suppliers but also increased economic fragmentation of world regions.

More than half of Baltic companies surveyed also cited a shortage of skilled workers as one of the biggest risks to the future of their business. There is also a high level of concern regarding labor costs — a risk highlighted by half of all Estonian companies surveyed.

Asked what measures businesses have already taken or plan to take to mitigate the consequences of skilled worker shortages, the most common responses by Estonian companies included expanding in-house training (37 percent), making greater use of temporary workers (30 percent) and recruiting skilled workers from abroad (30 percent).

Asked whether the framework conditions for sourcing labor from third countries should be relaxed, nearly 80 percent of Estonian businesses surveyed agreed, 30 percent of which were of the opinion that these framework conditions should definitely be relaxed.

A total of 87 percent of Estonian businesses surveyed considered rising labor costs to be a problem either currently affecting them or that will be affecting them in the near future; 8 percent of respondents considered the problem to be serious enough that they would even consider relocating.

Nonetheless, the vast majority of Estonian companies surveyed would choose Estonia again as a place to invest.

The German-Baltic Chamber of Commerce (AHK) conducted its annual business survey of member companies from March 30 through April 22. The survey was carried out simultaneously in 16 Eastern and Central European companies and involved more than 830 companies in total, including 71 from Estonia, Latvia and Lithuania.

The AHK is part of the German network of bilateral foreign chambers of commerce, which covers more than 90 countries worldwide. It has been active in the Baltic states for more than 25 years and currently has over 400 members.

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