Pessimism engulfs local firms
It will take at least two years for one in every three enterprises in Greece to revert to the profit levels they had before the advent of the pandemic, while one in every five believes it will need three or four years, according the annual Navigator survey that HSBC has conducted in 39 countries.
On the optimistic side of the survey, 63% of the 101 participating companies in Greece said they intend to increase their investments next year; it remains to be seen whether these investments will be productive, as most of them will focus on marketing, cash flows, fund management and improving the consumer experience.
The survey, which was conducted in September and October – i.e. before the second lockdown – further showed that only 9% of Greek enterprises now make more profits than they did in the time before Covid-19, while 34% expect to return to their pre-pandemic profits by the end of next year. Another 32% expect that to happen within two years, while 11% think they’ll have to wait until end-2023. There is also 8% who do not see their profits recovering in full before the end of 2024.
The pandemic has not only slashed profits but also the optimism of Greek enterprises. Therefore, while in 2019 Greek companies were among the most optimistic in Europe as regards their future growth, this year they are quite pessimistic in comparison with those in the rest of Europe and beyond.
The rate of local corporations with more optimism regarding their outlook this year compared to 2019 has dropped from 65% to 28% within a year, a much bigger decline than those seen in Europe and the rest of the world.
That pessimism was also reflected to an extent in the November economic sentiment data released by the Foundation for Economic and Industrial Research (IOBE).
The survey’s sentiment index slipped last month to 91 points from 93.2 points in October, while the consumer confidence index dropped to its lowest point since July 2018 – -48.3 points – down from 45.5 points in October’s survey.