Study: Companies worry more - unemployment rate will grow to 8%-9%
Managers estimate that Romanian economy will recover with difficulty and will form a U shape, according to a study made by Impetum Group, according to which 75% of managers think the unemployment rate will grow to 8%-9%.
Impetum Group, a Romanian group devoted to the mission to increase business value in any stage of a company, makes public Confidex Q3 2020 results, which measure the Romanian managers' confidence in the present economy and is meant to set up concrete landmarks for businesses and to support managers in making decisions adapted to reality. Confidex is the first market study which grants special attention to big companies. 75% of the 450 companies studied have over 1 million euros business figures and 31% over 5 million euros as business figure. Only CEOs or C level managers from Romanian companies answered the study.
“The Confider index , which shows the confidence degree of Romanian managers in economy remains constant at 41 out of 100 points. Although the average is constant, companies are less optimistic than in Q2, 2020 and the number of those who are either very optimistic or very pessimistic drops,”the study shows.
The managers' confidence degree manifested through Confidex index, shows a mixture of relaxation during the summer and worries for the future.
While after the first quarter of pandemic, Confidex Q2 study indicates the managers' more emotional prospect, after another quarter of health crisis their attitude tends to become rather a rational one, more adapted to the present reality. 82% of managers consider that economy is affacted by the health crisis, while 78% are worried and very worried by this fact.
Although economic activity over June-August 2020 knew a slight recovery, managers started adapting to the new reality, the number of those who are worried is growing.
According to Confidex Q3 2020 study, HoReCa segment continues to be the most affected, followed by trade and services. In agriculture and industry, figures show just a slight improvement. Managers in constructions and average company managers are the least worried.
Prospects seen in Q3 2020 are more optimistic for quarter 2, but measure adopted by managers are harsher.“Although they consider that European and national economies will recover in two years, when it comes to the activity sector and their own company, the managers' prospects are more optimistic now than in Q3. They see recovery in a year and a half. At the same time, they estimate a smaller drop of the business figure, by 15% versus 17% estimated before the pandemic. However, measures adopted by managers are harsher. The number of those who used salary cuts (18%) and even fired (21%) is growing,” the study shows.
At declarative level, Romanian managers are counting on investments and productivity increase rather than on reducing costs and more than 50% of managers have in view reconsidering company strategy, accelerating digitization and intensifying innovation. However, the first measures adopted are of renouncing marketing costs (58%), delaying IT investments (48%) and delaying research development activities (47%).
GDP, market capital and private investment evolutions will be marked by drops in the next thee months, according to Confidex Q3. Compared to Confidex Q2 there is a higher share of people who think the leu will drop against the European currency, from 58% to 79%. At the same time, the percentage of those who declare they do not know whether the capital mrket will grow or drop (from 6% to 18%).
As for public investments, the perception is a divided one. Practically, a third of respondents will see a drop or stagnation, a situation similar to Q2 in Confidex.