The new edition of the survey “Romanian Business Outlook in 2019” launched by Valoria and conducted in partnership with Doingbusiness.ro, presents the comparative data from the first and second semesters, offering a unique perspective of how companies forecast business evolution in 2019.
In the opinion of the CEOs of Romanian companies, one of the measures that would improve the Romanian business environment in the first place is the decrease of the taxation of work (84%), followed by the control and limitation of the tax evasion (72%) and the development of the infrastructure (61%) between the 421 answers.
The evolution of the turnover
Compared to the edition from the beginning of 2019, the growth perspective of companies in the second semester is more conservative. We see an 8pp decrease (percentage points) of companies expecting higher turnover by 5%-10%, partially offset by a 5pp increase of those forecasting a 10%-20% increase in turnover. At the same time, the percentage of companies that expect to maintain turnover in 2019. increases by 6pp. At the level of industries, the largest increase in turnover of 20% -30% is predicted by 19% of the food and agriculture companies.
The evolution of the profit
The forecasts regarding the evolution of the profit from the second semester of 2019 are slightly more pessimistic on the growth level 5%-10%, but more optimistic on the higher levels. Although 32% of companies (compared to 26% previously) expect their profit to increase between 10% and over 30% this year, we see increases on some levels of negative evolution. It maintains approximately the same percentage (9% as against 8%) of the company that says that their profit will not increase in 2019. At the level of industries, the most important profit growth, of 10%-20%, is expected by 32% among companies in the pharmaceutical and healthcare industry.
The evolution of the investments
Compared to the first semester, when 23% of companies said they would not increase investments in 2019, in the second semester 21% are of the same opinion. We also note that 43% of companies want to increase their investments by 1%-10% compared to 36% previously. Only 14% of companies say they will increase investments by 20%-30% and over 30% in the second half, compared with 11% in the first half of the year. At the industry level, the largest increase in investments is expected by 23% of the Agriculture and Food companies that say they will increase investments by 10%-20% this year.
The evolution of the number of employees and wages
29% of the Romanian companies do not expect any increase in the number of employees in the second semester compared to 26% in the first semester. At the same time in both semesters, 41% of companies said they expect their staff to increase this year between 1% -10%. On the upper levels, from 20% to over 30%, 11% of companies expected their number of employees to increase in the second semester, compared to 5% in the first semester.
Of the analyzed industries, the one that estimates the highest growth is the Agriculture and Food industry, in which 24% of companies expect 5%-10% increases in the number of employees this year.
If at the beginning of 2019, 22% of the companies did not expect wage increases, in the second semester the percentage drops to 18%. The percentage of companies that will increase wages by 5%-10% in 2019 decreases by 2pp, but increases the percentage of companies expecting a growth of 10%-20%, from 12% in semester one to 17% in semester two.
Top 5 challenges and opportunities
The most important challenges for companies in the second half of 2019 are: attracting and retaining the workforce (62%), increasing competition (55%), managing business expansion (34%), increasing costs (28%) and collecting invoices ( 26%).
For the Romanian companies, the most important opportunities reported in the second semester of 2019 are: demand growth (43%), new products and business lines (41%), re-technology and digitization (34%), development on foreign markets (28%) ) and access to European funds (28%).
About the survey
The survey Business Evolution in 2019 gauges the managers’ perception of the evolution of the Romanian business environment in the second half of 2019 and is based on a questionnaire answered by 421 top executives from companies in various industries. The questionnaire was applied between 2nd September 2019 and 15 October 2019. Some 12% of respondents come from companies with a turnover of more than EUR 100 million, 5% of companies with a turnover of EUR 50-100 million, 17% with a turnover between EUR 10-50 million, 31% with a turnover between EUR 1-10 million, and 35% with a turnover under EUR 1 million. 43% of respondents are CEOs / Presidents / General Directors. This survey was conducted in partnership with Doingbusiness.ro