Romanian business leaders appear to be more confident about the growth prospects of their own companies in 2013 than the wider market. A new study published today (February 12 ) by consultancy firm Ernst & Young found that 65 percent of business leaders in Romania were confident of growth this year, with 25 percent “very confident” and 40 percent “relatively confident.”
However, when it comes to the industry in which their companies operate, only 4 percent of respondents said they were very confident of growth in 2013. “Although 2013 appears to be a challenging year in many respects, many companies responded to our survey saying that they expect to grow,” said country managing partner at Ernst & Young Romania Bogdan Ion.
Just over 50 percent of the respondents said they expected moderate growth in turnover of between 5 and 10 percent this year. For profits, 37 percent of the companies expect a 5 – 10 percent rise, 22 percent foresee increases of up to 20 percent and 9 percent predict that profits will go up by 20 – 30 percent. Overall, this equates to 68 percent of companies expecting profits increases between 5 and 30 percent in 2013.
The businesses surveyed look as though they are ready to face another difficult year, with the vast majority, some 76 percent, indicating that they will stick it out and stay on the market, even if it is weak or in recession. Innovative business approaches and mergers and acquisitions were given as potential tactics to survive.
The most important factors that define success on the local market are turnover, according to 93 percent of respondents, customer satisfaction – 77 percent and market share, 64 percent. As for levels of demand in 2013, the majority of businesses, some 66 percent, are not expecting major changes.
Just over half the businesses surveyed expect staffing levels to remain the same in 2013, while 23 percent foresee possible reduction and 21 percent entertain the possibility of taking on more employees.
With 47 percent of companies in the survey having used bank loans as a source of financing last year, 45 percent are set to continue this policy in 2013. Meanwhile, 41 percent of the companies are thinking about trying for EU funds this year.
Innovation seems to be a popular aim, but very much from within the company as opposed to looking for third parties. More 60 percent of respondents hope to encourage innovation within the company, while just 7 percent plan partnership with research and education organizations.
Low prices do not appear to be a popular strategy for upping sales this year. Only 18 percent of the companies are set to compete on lowest price, while 75 percent intend to offer new products and services to existing customers and 33 percent aim to take their existing offers to new markets.
The Ernst & Young Business Outlook Survey, A vision for growth is based on a study carried out between January 21 and February this year 5. The report uses the answers of 105 top local executives, outlining their outlook on the business environment in Romania for 2013.
Ernst & Young is a global professional services firms with approximately 167,000 employees in 700 offices across 140 countries, and revenues of approximately USD 24.4 billion in 2012. In Romania, Ernst & Young was set up in 1992 and now has 500 employees in Romania and Moldova. The firm provides assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Ernst & Young has offices in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau.
(photo source: sxc.hu)