AmCham Romania survey: 55% of member-companies expect lower revenues this year

06 July 2020

About 50% of the companies that participated in this year’s AmCham Business Barometer expect to conclude this year with lower revenues, number of employees and investments compared to 2019 when only 10% recorded a decrease for the same indicators.

Thus, 55% of the respondents expect lower revenues this year, and only 20% still expect their revenues to grow compared to 2019. At the same time, 44% of respondents expect their number of employees and investments to be lower this year compared to 2019. Only 8% see a headcount increase and 21% expect higher investments.

When asked about the evolution of their turnover in 2020 compared to 2019, 18% of the respondents said they expected a drop of over 25%, and 24% indicated a decline of 10-25%. Meanwhile, 29% expect only a slight contraction (0-10%) and 29% expect stagnation or growth.

“2020 is an atypical year for the economy due to the COVID-19 pandemic. Consequently, the results of the survey reflect this new reality, and companies in Romania predict significantly lower results in terms of revenues, number of employees, and planned investments than last year,” said AmCham Romania president Ionut Simion.

“Amid this challenging context that also generated opportunities, AmCham calls for immediate action towards economic recovery and a sound post-pandemic business and investment climate. In this context, we welcome the National Plan for Investments and Economic Recovery launched by the Romanian Government that outlines public investments above EUR 100 billion over the next decade. At the same time, Romania must take full advantage of the new opportunities available in the EU financing framework such as Next Generation EU by taking fast, strategic, and visionary action for the future,” he added.

The AmCham members have expressed a relatively optimistic outlook for the economic recovery, with 45% considering most likely a midterm recovery – the U shape, and 11% a rapid recovery following the pandemic shock - the V shape scenario. Meanwhile, 20% expect low economic activity after the shock caused by the pandemic – L shape and 24% expect several COVID-19 infection waves followed by recovery periods – W shape scenario.

Romania’s top competitive advantages in the post-pandemic investment climate are the EU member status (indicated by 83% of the respondents), market dimension (53%), quality of digital infrastructure (50%), and human capital quality (47%).

However, 40% of the respondents say the current investment climate in Romania is poor, and only 22% consider it good. Moreover, 90% of the respondents see transport infrastructure as weak or poor, and 76% believe infrastructure investments should be part of the post-pandemic economic relaunch program. Some 73% of the AmCham members also want the state to accelerate its digitization (for the public and fiscal administration).

Most respondents (81%) rely on their own funds for financing this year, 34% expect loans from their shareholders, and 31% consider bank loans. Some 45% of the respondents don’t plan new investments this year, and 30% only consider minor investments of under EUR 1 mln.

A total of 131 AmCham members participated in this survey, which took place between May 15 and June 29.

editor@romania-insider.com

(Photo source: AmCham Romania)

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AmCham Romania survey: 55% of member-companies expect lower revenues this year

06 July 2020

About 50% of the companies that participated in this year’s AmCham Business Barometer expect to conclude this year with lower revenues, number of employees and investments compared to 2019 when only 10% recorded a decrease for the same indicators.

Thus, 55% of the respondents expect lower revenues this year, and only 20% still expect their revenues to grow compared to 2019. At the same time, 44% of respondents expect their number of employees and investments to be lower this year compared to 2019. Only 8% see a headcount increase and 21% expect higher investments.

When asked about the evolution of their turnover in 2020 compared to 2019, 18% of the respondents said they expected a drop of over 25%, and 24% indicated a decline of 10-25%. Meanwhile, 29% expect only a slight contraction (0-10%) and 29% expect stagnation or growth.

“2020 is an atypical year for the economy due to the COVID-19 pandemic. Consequently, the results of the survey reflect this new reality, and companies in Romania predict significantly lower results in terms of revenues, number of employees, and planned investments than last year,” said AmCham Romania president Ionut Simion.

“Amid this challenging context that also generated opportunities, AmCham calls for immediate action towards economic recovery and a sound post-pandemic business and investment climate. In this context, we welcome the National Plan for Investments and Economic Recovery launched by the Romanian Government that outlines public investments above EUR 100 billion over the next decade. At the same time, Romania must take full advantage of the new opportunities available in the EU financing framework such as Next Generation EU by taking fast, strategic, and visionary action for the future,” he added.

The AmCham members have expressed a relatively optimistic outlook for the economic recovery, with 45% considering most likely a midterm recovery – the U shape, and 11% a rapid recovery following the pandemic shock - the V shape scenario. Meanwhile, 20% expect low economic activity after the shock caused by the pandemic – L shape and 24% expect several COVID-19 infection waves followed by recovery periods – W shape scenario.

Romania’s top competitive advantages in the post-pandemic investment climate are the EU member status (indicated by 83% of the respondents), market dimension (53%), quality of digital infrastructure (50%), and human capital quality (47%).

However, 40% of the respondents say the current investment climate in Romania is poor, and only 22% consider it good. Moreover, 90% of the respondents see transport infrastructure as weak or poor, and 76% believe infrastructure investments should be part of the post-pandemic economic relaunch program. Some 73% of the AmCham members also want the state to accelerate its digitization (for the public and fiscal administration).

Most respondents (81%) rely on their own funds for financing this year, 34% expect loans from their shareholders, and 31% consider bank loans. Some 45% of the respondents don’t plan new investments this year, and 30% only consider minor investments of under EUR 1 mln.

A total of 131 AmCham members participated in this survey, which took place between May 15 and June 29.

editor@romania-insider.com

(Photo source: AmCham Romania)

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