In the second half of 2017, companies have made significant adjustments to previously projected figures for turnover, profit, employee numbers, salary levels and investments for this year, according to the survey report „Business evolution in 2017” released by Valoria. The percentage of companies expecting negative profits is now 20% compared to only 6% at the beginning of the year, while the percentage of companies which do not make investments in 2017 reaches 26% in the second half of the year versus 10% in the first half.
„Business evolution in 2017 is a research on the Romanian business environment. We ask managers the most important questions, which eventually find their answer in the company’s profit and loss account or cash flow. This analysis shows how the business outlook of the Romanian companies evolved in the second half of 2017. Unfortunately, the comparative data indicate a change in the business sentiment, the appetite for investment being the one that eroded the most, indicating a preservation instinct already activated by tax and legislative developments in recent months”, says Constantin Măgdălina, Emerging Trends and Emerging Technologies Expert, co-author of the research.
Compared to the first half of 2017, the company growth forecasts get even more conservative. In the last 6 months, we see a slight percentage increase of companies expecting a fall in turnover this year, from 13% to 17%.
The profit forecasts for the second half of 2017 are pessimistic. Although 31% of companies (vs. 32% previously) expect their profit to grow by 1% -5%. Also, in September 2017, 28% of companies (compared to 12% previously) have negative expectations about their profits in 2017.
According to the survey results, 26% of companies (compared to 10% in the first part of the year) say they will not make investments in 2017: telecommunications (50%), construction and real estate (38%) and professional services (25%) say they do not make investments this year. Moreover, the number of companies wanting to increase their investments dropped to only 15%.
About 24% of companies expect the number of employees to stay the same in 2017. Of all 12 industries included in the compared analysis, only in the telecommunications and professional services industries are most companies (50% and 31% respectively) who say they maintain the same number of employees in 2017 as in 2016.
At the beginning of the year, 93% of companies predicted wage increases. Six months later, their percent dropped to 84%. The industries where most companies say that wages will increase by 10% -20% this year are: pharmaceuticals and healthcare (38%), construction and real estate (35%), research and development (33%) and agriculture (30%).
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„This analysis is the consequence of the need to understand the economic environment in Romania. It records the opinion of the respondent companies on the evolution of turnover, profit, investments, number of employees, salaries. At the beginning of 2017, companies’ responses indicated some optimism. Even if the realities of each industry are specific, the comparative analysis presented in the autumn edition of the Valoria study shows an important negative adjustment of these indicators operated by companies in a year that put great pressure on the business environment in Romania. We will see how these trends will be reflected next year in the next blitz survey of March 2018”, says Elena Badea, Managing Partner Valoria.
This survey explored the perceptions top executives of major companies from Romania – multinational and entrepreneurial – about the expected business developments in 2017 by indicators such as turnover, profit, investments, number of employees and wages. The questionnaire was applied in the period from 28 August to 29 September 2017. Valoria’s survey on the perceptions of the Romanian business environment in 2017 is based on a questionnaire that examines the answers of 308 top executives from companies in various industries. 5% of respondents represent companies with a turnover of more than EUR 50 million, 18% of companies with turnover between EUR 10-50 million, 42% with turnover of 1-10 million EUR and 35% in 1 million EUR turnover. 52% of respondents are CEOs/Presidents/General Directors. This was carried out with the important support from Doingbusiness.ro.
Valoria Business Solutions is a company providing training, consulting and executive coaching services. The company’s mission is to transform the potential of teams and organizations into value. Competence, confidence, innovation and passion are the values that sustain us in everything we do. Learn more about us at: www.valoria.ro.
