ECONOMY

Smaller companies forecast revenue drop as crisis worsens

Small Greek businesses expect revenue to fall in the first half of this year as the economic environment deteriorates, a Marc SA poll showed.

Half of 1,200 enterprises surveyed said they foresee difficulties in the coming months and are at risk of shutting down, according the poll, which was posted on the website of the Small Businesses Institute at the Hellenic Confederation of Professionals, Craftsmen and Merchants. More than 77 percent of those questioned said they expect business prospects to worsen in the first half of 2012.

Greece?s government committed to additional austerity measures equal to about 7 percent of gross domestic product over three years to secure a second financing package from the European Union and International Monetary Fund.

Fifty-eight percent of the businesses questioned said that through July 2012 the national priority should be to stabilize the economy and keep the country in the euro area.

The new measures will lead small and medium-sized businesses to a ?dead-end and the Greek economy to a deeper downturn,? the National Confederation of Hellenic Commerce, known as ESEE, said in an e-mailed statement Thursday. Higher taxes and a 22 percent cut in the minimum wage will hurt consumption and the ?serious risk? of default remains.

Retail sales in November declined 6.3 percent from a year earlier, according to Hellenic Statistical Authority data released on Jan. 31.

Sales are expected to fall further in the first six months of this year, according to 79 percent of those polled. Eighty percent of respondents expect the liquidity situation to worsen in the six-month period, while 74 percent said they drew on their personal deposits to cover operating costs.

Nearly 60 percent of those polled plan to keep employee numbers unchanged in the next six months, while 32 percent said staff cuts are ?likely.? More than 150,000 jobs were cut at small businesses in 2011, the study showed.

The poll was conducted for the confederation between Jan. 10 and Jan. 18. Small businesses are those that employ as many as 49 people.

[Bloomberg]