At aggregate level, according to companies polled, the main financial indicators remained largely steady in October 2016-March 2017, similarly to the developments seen in April-September 2016. The share of companies posting higher labour costs went up from the previous round (37 percent, from 31 percent).
For 86 percent of companies, monthly loan expenses remained unchanged from the previous six-month period. In the period under review, the share of companies that posted a drop in the profit margin added 4 percent, versus the previous period.
Unlike SMEs which reported a 25 percent pick-up in their turnover, 48 percent of large companies saw a higher turnover, with 55 percent of the latter also reporting greater labour costs (versus 37 percent of SMEs). A significant share of exporters and importers recorded a rising turnover, however in the context of higher labour costs, while only a small number of respondents reported a larger profit margin.
By economic activity, firms in industry are more pessimistic about profit, with 40 percent of them. reporting a lower net profit (compared to 33 percent according to the previous survey). Firms in agriculture saw the most sizeable improvement in turnover versus the previous survey, with 27 percent of them reporting a turnover rise compared to only 5 percent in the previous round. At the same time, a larger part of these firms incurred also higher costs (loan expenses, labour and other costs).
Indebtedness (calculated as a ratio of debt to assets) remained relatively unchanged, according to 58 percent of companies polled at aggregate level, while climbing for 10 percent of respondents.
The most pressing problems faced by companies
Companies’ answers show that the main obstacles encountered in performing their activity have remained the same as in the previous survey round, especially: fiscal unpredictability, high level of taxation, competition and lack of demand.
SMEs and large companies deal, however, with different problems, with the latter deeming that the availability of skilled staff has also a notable impact on their activity.
In addition, the results of the current survey round indicate that the lack of demand and competition are low-impact factors for large companies.
Access to finance does not count among pressing problems for companies, according to 64 percent of respondents (compared to 60 percent in the previous round). 16 percent of the firms that pointed out their financing needs view access to finance as having a significant impact on their activity, whereas only 11 percent of firms that do not need financing attach great importance to this factor.
Access to finance is more important for companies with non-performing loans than for companies that do not have non-performing loans, according to the answers of 33 percent of respondents and 13 percent respectively.
The importance of access to finance for companies with non-performing loans lost 5 percentage points from the survey conducted in April-September 2016.
In agriculture, industry and trade, production factor costs and labour costs weigh more heavily than across the other sectors. Besides, the industrial sector is having difficulties in finding available skilled staff. Companies in the trade sector face the stiffest competition.
For further information: NBR – Survey on the access to finance of the non-financial corporations in Romania