ECONOMY

Industries see moderate recovery in sales, profits

After a year of weak profits and sales, the Greek manufacturing industry is confident of staging a moderate recovery this year, a survey conducted by research firm ICAP for the Federation of Greek Industries has found. The survey, which covered 302 companies between March and April this year, however exposed the sharp divergence between small and medium-sized enterprises and companies with assets over 30 million euros on how they view their prospects. «Industries’ expectations and goals for this year can be characterized as optimistic, but compared with 2002 estimates, they are less sanguine on sales, exports and gross profits,» ICAP said. Companies reported setting lower targets with regard to sales, gross profits and exports this year on the one hand, but raised goals on pretax profits, wage costs and hirings. The moderate estimates came following slight increases in sales, pretax profits and exports last year as the sector felt the fallout from the global economic slowdown and slowing domestic demand. Commenting on the results, Odysseas Kiriakopoulos, SEV president, said 2002 was a year during which businesses reined in costs and only invested in essentials. «It was not a bad year but it was also not a particularly good year,» he said. Firms surveyed said sales growth this year should double the 2002 figure, with the bigger companies expecting an eightfold increase. The smaller businesses were more restrained with their forecasts. Companies however said gross profits are due to remain flat at last year’s level, when earnings rose 9.5 percent. The forecast for pretax profits was more upbeat, as bigger firms predicted an end to last year’s losses and profits to increase by more than a quarter. Exports, on a decline for some time now according to official and Bank of Greece statistics, are set to pick up sharply this year, the companies said. Businesses also said they planned to invest more following a large fall in investments in 2002. While the smaller firms plan to boost their budget substantially, the major companies said investment spending would not be cut as much as last year. The survey showed that about one in two companies viewed the enlargement of the EU positively, saying it would open up new export markets. One in five companies said they were ready for the implementation of International Accounting Standards, while half of those surveyed reported ongoing preparations for the change. IAS is optional for listed companies this year but will become mandatory in 2004. An overwhelming majority of the firms said corporate governance rules are to the benefit of the sector.