Great margin for growth in exports
Competitiveness in small and medium-sized enterprises needs to become stronger, the National Bank of Greece argued in its biannual report on SMEs on Monday, though it also confirmed the steady improvement of business sentiment in the country.
“Demand expectations are positive for the first time since the start of the crisis but liquidity remains a hampering factor,” the report said.
Business sentiment continued to improve in the first half of 2014, reverting to positive territory for the first time since the start of the crisis, posting a 37-point rise from the first half of 2012.
“The improvement in sentiment was greater among the bigger enterprises in our sample, as the majority of smaller SMEs is still at the survival stage. Cash flow remains a huge problem as suppliers are asking for faster payments,” the NBG report added.
Despite drastic cuts to labor costs by about 50 percent in many sectors over the last five years, exports have failed to blossom in the way many had anticipated. While in 2008 the exports of SMEs amounted to 8 percent of their turnover, in 2013 this posted minimum growth to 9 percent. One in seven companies (15 percent) actually reduced sales abroad and just one in three companies increased exports. In total, just 40 percent of companies have an outward-looking character, with only 7 percent owing the majority of their sales volume to exports.
According to the report, 16 percent of SMEs that do not import anything today would certainly explore the option on the condition that obstacles raised by bureaucracy were lifted, gaps in transport infrastructures were covered and some incentives were given.
“There is a greater margin for the acceleration of the recovery of the corporate sector, as exporting has not yet managed to operate as a dynamic pillar of recovery,” said the report.
Among the specific obstacles cited by responding entrepreneurs were the problematic operation of customs offices, the insufficient access to export financing, and conditions in forwarding networks and transport infrastructures.
The main advantages of Greek products are their quality and the considerable experience of corporate officials, the report added.