BUSINESS

Firms freeze investment plans

DESPINA KONTI

TAGS: Economy

The majority of businesses are expecting a freeze on investments and a considerable drop in this year's turnover as they face a second year with the pandemic and its consequences, while instead of being viewed as a plus, most enterprises are concerned at the rise of teleworking, an ICAP survey has found.

The survey of 1,513 corporations showed that three in every four businesses have stopped working during the lockdown or belong to sectors hurt by the pandemic. They include companies in the fields of tourism, construction, retail and wholesale commerce, services and food & beverages.

Two out of three enterprises (67%) estimate that their turnover will go down this year compared to 2019, with only 25% expecting an increase. The average decline in turnover for companies across the economy is estimated at 21%, with a similar reduction in operating profits and liquidity (22%). Food service and tourism are predictably those set to suffer most in revenue terms (38% and 66% respectively).

The biggest blow is projected for small enterprises with an annual turnover of below 2 million euros, which will see an average slump of 24%. Companies with a turnover between 2 and 10 million euros will experience a significantly smaller reduction in revenues (14% on average) and those with takings over 10 million euros will only see a 10% contraction.

In terms of investment plans, more than half of the respondent businesses (55.6%) have suspended them or are preparing to do so by the end of the year. In tourism this applies to 55% of companies and in retail commerce to 37%, as both sectors have been hit hard by the pandemic.

In contrast, the share of information technology and telecommunications companies intending to revise their business plans is significantly smaller, at just 12%.

Most companies expect lower revenues next year too, as 51% of them foresee their turnover remaining below that of 2019, even though their forecasts are improved compared to 2020.

On a separate note, the majority of enterprises (54.6%) consider teleworking to be less efficient in comparison with on-site labor, and 43% say they do not intend to maintain it after the end of the pandemic.

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