Romanian businessmen have become more pessimistic in the last 8 months about business growth this year, according to a study from Ernst & Young.
In general terms, the perspective of turnover growth has declined during the last 6-7 months, with a larger number of companies envisaging negative growth values (12 percent in August vs 2 percent in February). However, the percentage of companies anticipating a turnover growth rate of 10-31 percent has increased from 28 percent in February to 37 percent in August 2014.
Companies’ expectations regarding profit growth largely stayed the same in August compared to February 2014. If at the beginning of the year 84 percent of respondent companies were expecting an increase in profits, in August the percentage reached only 81 percent.
However, 8 percent of respondents still say that they expect their profit to grow by more than 31 percent in 2014.
Companies’ expectations with regards to the evolution of their employees number are quite different in August compared to February 2014. While in Aug 2014, 18 percent of companies expect a 5-10 percent increase in personnel numbers, only 5 percent said so at the beginning of the year.
Also, 22 percent say now that they will have no new staff this year compared to 37 percent in Feb 2014.
More than half of the respondent companies (51 percent in August) predict a growth in salary level of 5-10 percent, while 30 percent of them (a 9 percent increase) continue to anticipate higher growth rates of 10-21 percent in salaries during this year.
When it comes to financing investments, companies continue to use mostly bank loans (54 percent in February vs. 49 percent in August), followed by share capital increase (10 percent in February vs. 22 percent in August). There was a steep reduction in the “own resources, intercompany loans and reinvested profit” segment, down to 16 percent in August from 34 percent in February 2014.