The percentage of companies expecting negative profits currently is 20% compared to only 6% at the beginning of the year, while the percentage of companies which do not make investments in 2017 reaches 26% in the second half of the year versus 10% in the first half.
”This analysis shows the evolution of business sentiment for companies in Romania in the second half of 2017. Unfortunately, the comparative data indicate a change in the business sentiment, the appetite for investment being the one that eroded the most, indicating a preservation instinct already activated by tax and legislative developments in recent months”, says Constantin Magdalina, Emerging Trends and Emerging Technologies Expert, co-author of the research.
Compared to the first half of 2017, the company growth forecasts get even more conservative. Over the last six months, survey shows a slight percentage increase of companies expecting a fall in turnover this year, from 13% to 17%.
In construction and real estate sectors, the number of companies forecasting an increase in turnover in 2017 is 65% in the second half of the year, compared to 83% previously. For IT companies, only 65% expect increases now, compared to 89% at the beginning of the year, and for professional service firms, the percentage drops to 65% from 94% previously.
The profit forecasts for the second half of 2017 are pessimistic. Although 31% of companies (versus 32% previously) expect their profit to grow by 1% to 5%, 19% expect profits to be higher by 5% to 10% and 10% forecast an increase from 20% to over 30%.
On industry level, 20% of IT firms expect a profit growth of 10-20%, while 40% of industrial production firms expect their profit to grow by 1% to 5%. Also, 50% of tourism, 64% of transport and 83% of utilities and energy companies expect profit growth.
According to the survey, 26% of companies (compared with 10% in the first part of the year) envisage no investments in 2017. Moreover, the percentage of companies willing to boost investments this year falls from 79% in March to 68% in September 2017.
The survey also shows that only 15% of companies plan to increase their investments by 10% to 30% versus 36% previously. Most companies in telecommunications (50%), construction and real estate (38%) and professional services (25%) say they do not plan investments this year.