In the second half of 2022, managers’ confidence was influenced by inflation, the increase in energy and fuel prices, but also the costs of raw materials.
Therefore, one in three companies declared themselves affected by the increase in energy prices, while 70% still declare to be affected by the war in Ukraine. At the same time, 43% of respondents to the CONFIDEX study estimate, in the next three months, a decrease in gross domestic product (GDP), private and public investments, as well as a devaluation of the national currency, in relation to the euro and especially to the US dollar. On the other hand, we see an improvement in sentiment which reached the level of 5.1, compared to 4.7 in spring 2022: 31% of managers are optimistic about the evolution of the economy in the coming period, which reflects the increased level of resilience and adaptability of the business environment. At the opposite end of the scale, only 27% look at this development with concern, and 42% look cautiously at the future of Romania’s economy.
Almost one in four managers (24%) believe the situation of the companies they represent has improved over the last six months, and overall they believe their companies are in a better state than the other firms operating in the same sector: 55% see the situation of the field in which they operate has deteriorated and 77% say Romania’s economy has deteriorated.
The last two years have led managers to invest in digitization. Thus, 21% of company managers installed photovoltaic panels, 12% resorted to refurbishments, and 9% reduced consumption. However, more than 50% of companies took no action. The most likely equity investments that managers would make in the next period are in their own companies.
Recent turmoil has also impacted companies’ recruitment plans. Thus, 22% of organizations have not hired anyone in the last two years, while only 8% have increased their teams by more than 50 employees. The others have employed between one and 50 people in the last two years.
Regarding the last six months of activity, 27% of managers admit it has been difficult for them to attract labor, almost a quarter have difficulties with working capital, and 22% talk about more difficult access to lending. On the other hand, 33% have improved their relationship with customers and 28% have a better relationship with employees.
Almost nine in ten managers expect Romania’s economy to face increased inflation in the future, and 84% believe in a prolonged energy crisis. Moreover, the increase in the unemployment rate should be anticipated in the coming period, while 82% of managers expect a new economic recession.
To overcome the challenges ahead, 56% of managers prioritize increasing their sales, keeping jobs, improving customer relations, digitizing, and automating the company. In addition, 39% consider cost reduction as an adaptation strategy. Moreover, the National Recovery and Resilience Plan (PNRR) can be a real support for managers, being very popular among them. At the same time, 13% of the companies which participated in the study applied for a financing scheme.