At least this is the case according to the results of the survey, Romanian Business Evolution in 2017, conducted by Valoria.
The survey was conducted among 308 leading executives of major companies - multinationals and entrepreneurials - about the outlook of business development in 2017. The surveyed indicators are the following: turnover, profit, investments, employee turnover and salary levels.
The decision makers who provided information on these indicators lead companies in 14 industries, with a turnover of between 1 million EUR and more than 100 million EUR. Taking into account that the main industries contributing to Romania’s 6.1% economic growth estimated by the National Prognosis Commission for 2017 are: production, agriculture and food, construction / real estate, wholesale and retail, we selected the relevant data from Valoria analysis.
The growth prospects of manufacturing companies is a reserved one. Only 29% of companies expect to increase turnover by 5% -10% (compared to 23% at the beginning of the year). At the same time, 4% of respondents (compared to 13% previously) do not foresee any increase in turnover in 2017.
Forecasts for profit growth in 2017 have undergone adjustments in the second half of the year. 39% of the production companies (up from 35% previously) expect an increase in their profit between 1% -5% and 11% (versus 3% at the beginning of the year), expect that the company's profit will not suffer a change from the previous year.
According to survey results, 23% of production companies say they will not increase investments in 2017, compared with 10% just six months ago. Regarding the evolution of the number of employees, 32% say they expect their staff to grow by 1% -5% during this year while 34% expect the salary levels to rise by only 5-10% in 2017.
Agriculture and food
Agriculture and food companies have a positive growth outlook in 2017. 40% expected their turnover to grow between 10% and 20%, while 20% are expected to grow between 5% and 10%. Profit is expected to be in the range of 5% -10% for 40% of companies, while investment will increase by 30% over the same period. 60% of agriculture and food companies expect the number of employees to grow between 5% and 20% in relation to wages that are expected to grow in the same range.
Construction and real estate
In the second half of 2017, construction and real estate companies adjust their growth rates. No less than 8% of companies expect to increase turnover by 10% -20% (compared with 33% at the beginning of the year). The outlook is confirmed by the National Prognosis Commission, which adjusted the 6% growth forecast for this industry sector made in 2016 for this year at 1.5% today. As a result, the forecasts for profitability in 2017 are also adjusted. Only 12% (compared to 33% at the beginning of the year) expect the company's profit to grow between 10% -20%. In September 2017, 37% of construction and real estate companies said they would not invest in 2017, and 31% would invest 1% -5%.
In the second half of 2017, 38% of respondents expect no increase in the number of employees in 2017, while 27% of construction and real estate companies expect wages to rise between 5% and 10% and 35% % of companies expect wages rising by 10% -20%.
It is not surprising that the growth prospects of wholesale and retail companies are positive. They expect to increase their turnover by 5% -10% (compared to 23% at the beginning of the year). At the same time, 25% of respondents (compared to 23% previously) forecast a 10% -20% increase in turnover in 2017, and 16% (versus 15% previously) are expected to grow between 20% %.
The forecast for profitability in 2017 is optimistic, 18% of companies (compared with 8% in March 2017) predicts a profit increase between 10% and 20%. According to research results, 14% (versus 8% previously) of wholesale / retail companies say they want to increase their investments by 10% -20%.
Declines from 31% to 20% the percentage of companies that say they expect their staff to grow by 1% -5% this year. Only 34% of wholesale / retail companies (vs. 46% previously) expect salaries to grow between 5% and 10% and 31% of companies expect increases of 1% -5%.
The end of the year
Even the most optimistic commentators did not expect a 6.1% economic growth of Romania's economy. However, if this happens, this evolution has as main sources the 7.7% increase in consumption linked to the 22% increase in the salaries in the budgetary sector and the decrease of investments to 2%. The increases of the above industries are important, but the performance of the first 3 is outpaced by unhealthy consumption. In 2017, Romania is experiencing a Black Friday illusion.