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Survey: 59% of the managers mentioned the drop in business with over 50 percent
67% of the managers in an interview of the barometre order by Sierra Quadrant, company in the sector of reorganisation of companies, focuses on the restructuring of business, while 59% of them reclaimed the drop in the business with over 50 percent.
‘The business people in Romania, investors, managers and employees with positions of reliability in the majority of the economic domains, see with precaution to the perspectives of the economy, in the context of the strengthening of the financial issues determined by the Covid -19 epidemics. The coronavirus covid-10 pandemics affected in a significant way the Romanian business environment, one already fragile, with over 90% of the companies with weak capitalisation, many of them in the area of survival, without financial availabilities on medium and long term’ the company says.
‘About the result of the barometre made between 10- 20 September , most of the 1,850 interviewees consider with worry the perspectives of the business they represent. Asked in what measure the pandemics influenced their business, 72% stated that the economic challenge generated by Covid-19 affected them in great measure, 21% in a certain measure, while only 7% considered themselves ‘ immune’ to the negative effects of the crisis.
Most interviewees (59%) spoke about the drop in business with over 50 percent. 13% said they had a reduction of the business between 20 and 50% and 18% spoke about the drop in collections with percentage of up to 20%. Only 7% stated that the turnover was not affected, while 12% avoided to answer.
According to the barometre Frames $ Sierra Quandrant, the drop in sales was in first plan, mentioned 61% of the interviewed managers. Second was the non-collection of bills (24%) followed by issues such as the closing-down of the activity, due to the shut-down during the pandemics.
Asked what measures were taken or will be taken to protect their business in the context of the pandemics, 67% indicated the restructuring of the business’ as a main measure, while only 16% stated there will be no supplementary measures. 17% avoided to answer.
The main measures to restructure included by the managers aim at the restructuring of the offers (3%), the reduction of the supplier loan (29%) the drop in the expenses for operations (23%), reduction of personnel (16%), digitisation of the companies activities (12%).
Asked what they should do if the business they lead or represent would get into difficulty, over 70% of the managers said they would use insolvency or preventive arrangement.
Beyond insolvency and preventive arrangement, the specialists estimate that many firms will close down during the next six months.‘We have almost 130,000 companies with over 850,000 employees who were at a loss before the crisis COVID and who survived during this period only due to the aids offered by the state. The large part of the companies, probably, will stop their activity completely and will close down their business immediately the state and the banks try to recover their money due in the context of taxes, or as the case is installments and leasing’ the analysts say.
The great majority of the interviewees (82%) are convinced that we will get rid of the pandemics in 2021. Only 11% consider there are few chances that the sanitary crisis be surpassed, while 7% did not want to answer.
According to the analysts at Sierra Quadrant, the surpassing of the pandemics period will not mean that the economic issues will stop overnight. Experts say, that in the present macroeconomic context with the state budget strongly affected by the crisis, it is not excluded that the economic challenges go on, especially during first quarter of 2021.
‘There is discussion in the public space about solutions for the reduction of the budget deficit with which the new government gets into 2021, and one of the variants could be the increase of taxes. A growth of fiscality, during the period after the elections in December, accompanied with the continuation of the depreciation of the national currency, could create big problems in the business environment. Let us hope that consumption comes back. In the optimistic variant, 2021 could represent a period of economic growth, stimulated by the infusion of over 80 billion euro from EU funds’ the Sierra Quadrant barometre says.
The barometre made by the company Frames at the command of Sierra Quadrant was made between 10 and 20th September 2020, by online questionnaires, phone and email, on a sample of 300 companies from different domains of activity, commerce, financial services, agriculture, energy, confections. IT, etc. The barometre was answered by 1,850 people.
The profile of the interviewees was represented by entrepreneurs, company managers, middle and top management, with higher education, 68% men and 32% women, average age 45 years old.