Declining trust in growth forecasts of Romanian companies for 2018

Declining trust in growth forecasts of Romanian companies for 2018

41% of large companies have reduced the level of the investments planned

Compared to the first semester, we can see a concentration of investments on smaller growth ranges, which indicates the caution of large companies regarding the investment plan. Thus, if 41% of companies announced intentions to increase their investment by more than 20% in the first half of the year, we no longer have such responses in the second half of the year. On the contrary, the percentage of large companies that say they have increased by 1%-5% this year went from 35% to 55% and those who say they have increased investment by 5%-10% in 2018 went from 16% to 31%.

The number of employees and wages have moderate or stagnant growth

Unlike the first semester, when 16% of large companies estimate increases in the number of employees on the 10%-20% level, now only 7% say this. Thus, in the second half of the year, the forecasts regarding the number of employees indicates a slight negative trend, as the number of large companies that say they will reduce the number of employees by 1%-5%, goes from 15% to 27%. Compared to the first semester, in general, the large companies estimate a moderation in wage growth on all levels. Only 31% of large firms say they will increase salaries by 5%-10% this year, compared with 41% of respondents six months ahead.

In conclusion

The fuel needed to run any business, trust in the future of business development is at low rates in large companies in Romania. If we do not fill the tank through wise and timely economic measures, we run out and come to a halt. The results of this study spot the red light flickering on board warning the very low level of confidence for decision-makers. The growth at microeconomic level is achievable on a basis of institutional stability and predictability at macroeconomic level. The chance to recover the economic competitiveness gap with the EU average will be made possible through responsible and competent leadership.

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