Romania observed the most significant growth in sentiment about companies’ financial outlook, according to the fourth edition of the Deloitte Business Sentiment Index (DBSI), with 63 percent of interviewed executives sharing optimism.
This represents nearly 48 percent increase since the first survey in September 2009 and it is more than three times higher than the previous edition of the survey, issued in April.
Romania also noted the biggest positive change in sentiment about credit availability, 87 percent of executives feeling that credit is available now, compared to 53 percent, six months ago. This is the largest share of optimists among the six countries surveyed- Romania, Poland, Hungary, the Czech Republic, Slovakia and Croatia.
Romania also showed a consistent positive trend in sentiments toward future revenues from sales, with the number of optimists increasing from 38 percent (September 2009) to 60 percent. Similarly, Romania recorded an increase in positive sentiment about new launches as well: 60 percent of respondents believe that they will be launching new products or services over the next year, a level of optimism similar to the one recorded in September 2009, the survey shows.
For the first time since the launch of the survey, the employment outlook for Romania has considerably improved, with 23 percent of respondents admitting they are considering expanding their workforce, up 15 percent since September 2009; also the percent of respondents considering reducing their workforce has gone down from 43 percent to 30 percent.
“These findings confirm an earlier report issued by Deloitte Romania in June (the second edition of the CEO Survey): most companies have completed the stage of cost-cutting measures and immediate remedies to the financial downturn; more and more executives are now thinking about the future, planning to increase revenues, add new products and services, or expand personnel,” said George Mucibabici, Chairman Deloitte Romania (in picture).
“However, while they are bullish about their companies’ own potential on the market, there are still concerns about the health of the economy as a whole.”
As in previous surveys, executives continue to view the prospects of their country’s economy with less optimism than their companies’ financial prospects. In Romania, 36.6 percent of interviewed executives now consider that the country’s economic prospects will improve over the next 6 months, down 10 percent from April. At the same time, 33.4 percent of respondents expect prospects to deteriorate, up from 26.6 percent in April.
When asked about their expectation regarding changes in the regulatory environment over the following 12 months, Romanian respondents showed more pessimism, 33 percent expecting a more restrictive environment, compared to 23 percent, six months ago. However, the percentage of optimism has also grown, 20 percent expecting less restrictive regulations over the next year (compared to 7 percent, in April).
Central Europe increasingly optimistic about the economy
The survey finds that executives in Central Europe, driven by Slovakia and Poland, are increasingly optimistic about the economy but positive sentiment has not spread to all quarters. Overall, the sentiment about the Central European economy has improved (48.6 percent of total answers). Compared to a year ago, positive sentiments increased by 22 percent, while negative outlooks decreased by the same percentage.
Although the overall outlook has become increasingly positive since the first survey in September 2009, opinion remains divided about the speed of recovery. Some economies in Central Europe are bouncing back faster than others from the financial crisis.
Slovakia, for instance, is the clear ‘winner’ of this survey in terms of positive sentiment, with 71 percent of executives now believing general prospects for the economy over the next six months are improving. In previous surveys, Poland has consistently been the most positive of all the six countries surveyed, so it is interesting that Slovakia now reports a similar rise in outlook to its neighbour, the survey writes.
It’s not all good news however: whilst the results of the survey broadly show that confidence is slowly returning, responses from other countries are much more muted than in Slovakia and Poland. Hungary, for instance, remains fairly static in outlook. Meanwhile, although Croatia and the Czech Republic see greater optimism in general economic prospects, overall they remain fairly cautious about the next six months, show data in the Deloitte survey.