Romanian companies are skeptical about their business development

Newsroom 19/07/2010 | 17:34

Companies in Bucharest have a low level of confidence in the development of their main business indicators in the next three months. According to Business Barometer, a survey carried out by MEYS Emerging Markets Research, numerous companies in Bucharest expect a decrease in turnover, investments, employment and exports, rather than an increase.

Of the surveyed companies, 39 percent expect a decrease in production prices and only 9 percent an increase. On the number of employees, 28 percent of the companies expect a decrease in their labor force, whereas a mere 9 percent are thinking of hiring more people. For developments in the volume of sales, the same negative trend is noticed; 39 percent of the companies expect a decrease in sales over the next three months compared to 21% expecting an increase. Companies in the construction sector are in general more negative than others when it comes to the expected changes in the short-term business indicators. However, the financial service sector is less negative about the development in turnover, profits and employment.

What’s more, the survey also demonstrates that the main obstacles against growth for the companies in Bucharest are high labor costs and contract violations. About 80 percent of the companies experience these two as the main obstacles and, more specifically, the transport and financial services sectors. High tax rates are the most important obstacles for the industrial sector, followed by relatively low labor productivity. The quality of infrastructure and crime are the most important obstacles against growth for the construction and transport sectors.

The Business Barometer survey was carried out in June by MEYS Emerging Markets Research, in cooperation with the Bucharest Chamber of Commerce and Industry (BCCI), among a representative group of Romanian companies located in the city of Bucharest. The survey contained questions about developments in the main business indicators (turnover, profits, employment, inventories, sales, investments and exports) and regarding the main obstacles to growth. The survey is to be repeated every quarter.


Corina Dumitrescu

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