The improvement in the overall outlook of Greek enterprises in 2004 was almost exclusively due to the larger ones, as seven out of 10 branches of economic activity displayed lower-than-average performance, according to a study prepared by Hellastat. According to the report, the combined turnover of 10,000 firms, covering the full spectrum of economic activities, rose 14.3 percent compared to 2003, and net pretax profits were up 22 percent. The biggest firms in the sectors of manufacturing, commerce and services performed better than the average, refuting the common argument that small and midsized companies (SMEs) have a comparative advantage in flexibility and speed in decision-making. Indeed, 33 percent of smaller firms in all three sectors showed a decline in turnover, both in total and in terms of the average per firm, in both 2004 and 2003. The overall results of SMEs showed further deterioration, with the exception of the manufacturing sector. Rather curiously, SMEs lag considerably behind larger businesses in terms of net profits, despite above-average gross profit margins. In the services sector, the overall picture of SMEs is rather dire, reflecting an inability to cope with operational and financial expenses. Irrespective of size of firm and sector, the mean net profit margin for 2004 is estimated to have shrunk by between 3 and 14 percent. According to the study, the 50 most numerous branches give a mixed picture; although combined turnover and profits showed improvements of 11 percent and 14 percent, respectively, seven out of 10 categories fell below the average, confirming the overall deteriorating situation among SMEs. The gap in the performance between large and smaller companies is especially apparent in traditional branches, such as hotels (11 percent rise in combined turnover and a 2.6 percent average fall per enterprise), food retailing (up 10.5 percent rise in total turnover and 3.7 percent on average), retailing of clothing and footwear (11.5 and 5 percent rise respectively), and tourism services (25.7 and 1 percent higher respectively). The gross and net profit margins declined respectively in 50 and 72 percent of firms surveyed.