Only 3% of Romanian companies drive the local economy

Only 3% of all Romanian companies are the engine of domestic economy, and half of these companies are in difficulty, according to a study carried out by local CITR Group. The number of companies that drive the Romanian economy dropped from over 23,300 in 2013 to around 19,500 in 2015. They represent 3% of all companies in Romania but generate 68% of the total turnover and employ 41% of the labor force in Romania. The number of employees in these companies dropped between 2013 and 2015. Some 19,000 jobs were lost during this period. About 36% of these firms, which are called “impact companies”, have a profitability ranging between 0-5%, a level too low to support gearing ratios of over 70%. Despite this, 39% of the companies with low profitability have debts amounting to 70-100% of their assets. Every year, over 1,000 of the important companies in Romania lose their relevance because they become smaller, and their total assets fall below EUR 1 million. “At this rate, we will have only 15,000 relevant companies at the end of next year, ie less than one (firm) per thousand inhabitants,” said Rudolf Vizental, CIT Resources CEO. editor@romania-insider.com