Valoria survey: Managers adjust the prospect of business growth for 2018

Valoria survey Managers adjust the prospect of business growth for 2018

According to the survey on „The business outlook in Romania for 2018” released by Valoria, 75% of companies in the second half of the year, compared with 84% at the beginning of the year, say they will have a higher turnover this year. Moreover, 40% of companies, compared to 24% previously, say they will keep the same number of employees, and 29%, compared to 17% at the beginning of 2018, say they will not raise wages.

„At each edition of our survey on ‘The Business Outlook in Romania’, we ask decision-makers about the projected growth in turnover, profit, investments, salary levels in the first half of the year, and validate the consistency of their forecasts in the second half of the year. The edition for the second half of 2018 shows that the business outlook continues to be rather negative. Comparative data with the first half of 2018 reveals this evolution. For most respondents, the forecasts for turnover and profit growth are being adjusted downwardly. The appetite for investment continues to erode. The opportunities for 2018 – economic growth, consumption, and exports – are offset by the challenges of labor shortages, low productivity and rising costs”, says Constantin Măgdălina, Emerging Trends & Technologies Expert, co-author of this survey.

Valoria survey Managers adjust the prospect of business growth for 2018 - 2

Turnover forecasts

Compared with the findings of the survey conducted in the first half of 2018, the prospect of company growth continues to be conservative. In the second half of the year, we see a 9pp (percentage point) decrease in companies expecting higher turnover by 5%-10%, but also a 5pp increase for those who forecast a lower turnover of 10%-20%, followed by an increase of 6pp for those who expect a lower turnover of 5%-10% this year. At the industry sector level, 20% of the IT companies, 18% of the industrial production companies, and 14% of the companies in trade are forecasting a 20%-30% growth in turnover.

Profits forecasts

Profit forecasts in the second half of 2018 are more pessimistic than those at the beginning of the year. Although 16% of companies (up from 14% previously) expect their profit to grow by 10%-20% this year, we see 9pp and 5pp decreases on 1%-5% and 5%-10% brackets. The percentage of companies that say their profit will be lower in 2018 from rises from 12% in the first half of the year to 30% in the second half. The most important increase of the profit, of over 30%, is foreseen by the 30% of IT companies, followed by 15% in industrial production and of 13% in construction and real estate with a forecasted profit growth of 20%-30%.

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