Thessaloniki Chamber of Commerce & Industry TCCI BAROMETER. Palmos Analysis Ltd.

Transcription

1 Thessaloniki Chamber of Commerce & Industry TCCI BAROMETER Palmos Analysis Ltd. March 2014

2 TCCI BAROMETER (Executive Summary) Thessaloniki Chamber of Commerce and Industry (TCCI), consistent to its efforts to increase information levels and inform both businesses and organizations (public or private) as well as Thessaloniki s community, continues the periodic Survey of Economic Climate (at the Prefecture of Thessaloniki) on the four business sectors of the economy and consumers. The Survey of Economic Climate at the Prefecture of Thessaloniki (TCCI Barometer) is conducted twice a year during the 2 nd fortnight of March and September, with a total sample of 1500 respondents (800 companies and 700 consumers). The survey covers all four sectors of the economy (industry, services, retail trade and constructions). TCCI Barometer survey is conducted via telephone interviews with the managers of businesses (General Managers, or Finance Managers, or Sales Managers or the owners in case of smaller companies) and with the use of questionnaires used by the Foundation for Economic & Industrial Research and the European Union, so that the results are comparable with the equivalent National and European surveys. 1. CONSUMER SURVEY The Consumer Confidence Indicator is calculated based on consumer s predictions for the general economic situation of the country, the economic situation of their household, the intention for saving and their prediction for unemployment levels. It must be mentioned that predictions are between +100 (all consumers anticipate an increase) to -100 (all consumers anticipate a decrease) and appear as differences between positive and negative responses. In particular, a negative difference means that the percentage of those who predict a decrease is higher than the one of those who predict an increase and vice versa. According to the survey, the consumers at the Prefecture of Thessaloniki appear pessimistic, as the Indicator of Consumer Confidence at the Prefecture of Thessaloniki stands at -38 points, apparently higher than the National one which stands at -60 points, while the European Union one stands at -7 points for March Compared to September 2013, a negative but improved climate among consumers is observed at the Prefecture of Thessaloniki (-38 from -50), while the relevant indicator has also improved at National level (-60 from -72). At the same time, the equivalent European Indicator has improved (-7 from - 12). In particular, consumers at the Prefecture of Thessaloniki indicate: Deterioration of their economic situation but decreased pessimism (compared to September 2013) pessimism for the future. Deterioration (albeit milder) of the national economic situation for the past year and significantly decreased pessimism for the future. Consumers in the Prefecture of Thessaloniki predict that prices will slightly fall during the following period. Moreover, there is a sense that prices also fell during 2

3 the past twelve months. These trends are in contrast with the trends observed at National and European level, where consumers say that prices increased during the past twelve months and that they will continue to rise in the future. Pessimism about the unemployment level in the country, although significantly reduced compared to September 2013 and in contrast with the National indicator, which stands at extremely pessimistic level, although improved. Continued (compared to September 2013) reluctance to currently make major purchases and reluctance for such purchases in the future. Extremely low intention to save, although the percentage of those who say that it is possible that they will save during the next 12 months has increased (17% up from 11% last September 2013). Is must be mentioned though, that when comparing to September 2013, there is a slight decrease in the percentage of those who say they manage to save (9% down from 11% in September 2013), while 43% of the consumers in the Prefecture of Thessaloniki live at the expense of their savings or borrow money (almost the same as in September 2013) and 48% say that they just break even with their income (up from 43% in September 2013). It is obvious that there has been an adjustment of household s living standards in order to match their reduced income. It must also be mentioned that there are signs of more positive views for the future, despite the negative current economic state. Constantly very low sales level as far as the car market in the Prefecture of Thessaloniki is concerned for the next 12 months. Absolutely inactive real estate market and reduced construction activity. 3

4 2. INDUSTRY SURVEY The Business Expectations Indicator for the Industrial Sector at the Prefecture of Thessaloniki remains slightly negative but improved compared to September 2013, and at the same level compared to the equivalent National one, which appears stability compared to September On the other hand, the European indicator has slightly improved compared to September 2013 but remains at negative grounds. The balance of positive negative estimates of the Business Expectations Indicator for the Industrial Sector stands at -6 points at the Prefecture of Thessaloniki (-4 at National and -3 at European level). It should be noted that this indicator has improved compared to September 2013 at local level (-6 from -13) and remained stable at National level (-4 from -5) and at European level as well (-3 from -5). Slightly worse (compared to September 2013) is the evaluation of the industrial sector in Thessaloniki for the past six months but the estimates for the next six months as far as production levels are concerned are very positive, and for the third consecutive time since September 2009, apparent optimism for production levels over the next six months is recorded. Very positive estimates are recorded as far as export activity in the near future at local level is concerned and there is a much better picture compared to the National one, while current exports level is viewed steadily negative compared to September Slightly pessimistic estimates appear as far as price levels are concerned for the following period, but for the first time marginal optimism is observed as far as employment levels are concerned. In particular, the views of the industrial sector at the Prefecture of Thessaloniki are summarized as follows: There is a drop in production (larger compared to September 2013), with an equivalent decrease in orders. There has been an adjustment of stocks and production levels at local level. Apparent optimism for the future is observed as far as exports are concerned, while marginal optimism is observed for the first time as far as employment is concerned. 4

5 3. SERVICES SURVEY Slightly less negative climate is observed within service companies at the Prefecture of Thessaloniki, compared to September Thus, the relevant Business Expectations Indicator for the Services Sector stands at -20 points, compared to +5 points nationally and +8 points at European level. Compared to September 2013, there has been less negative climate at local level (-20 from -27), significant improvement at National level (+5 from -10) and improvement at European level (+8 from +1). In particular, service companies at the Prefecture of Thessaloniki mention: Further drop in demand compared to September 2013 but steady deterioration of their financial situation. Improved expectations for the next six months for demand, slightly negative forecast for employment and steadily negative forecast as far as prices are concerned. 5

6 4. RETAIL TRADE SURVEY The Business Expectations Indicator for the Retail Trade sector remains at negative grounds at the Prefecture of Thessaloniki (and stable compared to September 2013), whereas the National indicator appears improved and the European indicator appears stable and almost neutral. Thus, the balance of positive - negative estimates of the Business Expectations Indicator for the Retail Trade sector stands at -17 points (from -17 points in September 2013) at the Prefecture of Thessaloniki, compared to -10 points (from -23 points in September 2013) at National and +0,5 points (from -0,4 points in September 2013) at European level. In particular, the views of retail companies at the Prefecture of Thessaloniki can be summarized as follows: Less pessimism for their activity and orders in the next six months compared to September Finally, they mention a downward trend for the employment level as well as for prices level over the next months. 6

7 5. CONSTRUCTION SURVEY The Business Expectations Indicator for the Construction Sector remains negative and stable in the Prefecture of Thessaloniki. Moreover, it stands lower than the National Indicator for the third consecutive time since the incorporation of the TCCI Barometer in March Thus, the balance of positive negative estimates of the Business Expectations Indicator for the Construction Sector stands at -43 points at the Prefecture of Thessaloniki, at -14 points at National and -25 points at European level. The evolution of construction activity in the past six months appears steadily negative compared to September There seems to be a slightly milder prices reduction trend compared to September 2013 at local level. Intention to reduce personnel over the next six months is significantly lower and nears neutral level. In particular, the views of construction enterprises at the Prefecture of Thessaloniki can be summarized as follows: A steady drop is observed in construction activity with a respective drop at the amount of new orders. The construction enterprises seem to be less willing about dropping real estate prices, while a further small decline in employment is predicted. 7

8 6. TCCI Barometer AD HOC CONSUMER QUESTIONS Aiming at the optimum use of "TCCI Barometer" as a research tool with a view to better inform the business community of Thessaloniki, new ad-hoc questions were incorporated TCCI Barometer s questionnaires on various topics such as consumer behavior and business environment. The questions were placed at the end of standardized questionnaires used "TCCI Barometer" to ensure continuity and reliability of the results of "TCCI Barometer". Consumer products prices Purchase criteria market for consumer products Only 16 % of consumers in the Prefecture of Thessaloniki say that, during the last six months consumer goods prices decreased slightly (10%) or significantly (6%), while the majority (53%) believes that they have increased significantly (28 %) or slightly (25%) and about one in four (28%) stated that they found no change. Price is the main criterion for making consumer goods purchases for 22% of the consumers in the Prefecture of Thessaloniki and product quality is referred to as the main criterion by just 7%. More than 2 out of 3 consumers (69%) at the Prefecture of Thessaloniki said that price and product quality are equally consider as criteria for consumer goods purchases, apparently looking for the so-called value for money in their purchases. Moreover, about half of consumers (51%) in the Prefecture of Thessaloniki said that they check the labels with the price-to-weight ratio on the products and they use that as the main criterion for their purchases, while 26% simply check these labels (without using them as a key purchase criterion) and only 22% (about 1 in 5) state that they do not even see these labels. Consumer rights - Consumer organizations - Consumer behavior Significant information deficit as far as consumer rights are concerned is observed at the Prefecture of Thessaloniki, as 42% of the respondents say that they are "not at all" (15%) or a little (27%) informed about their consumer rights. At the same time, 36% of consumers in the prefecture of Thessaloniki appear skeptical in relation to the work of consumer organizations, calling it "not at all" (16%) or a little (20%) positive, compared to 33% who characterize it very (8%) or "somewhat" (25%) positive and to 25% who say they do not know anything about the work of consumer organizations. Moreover, significant cuts in spending have been made by consumers in the Prefecture of Thessaloniki due to the economic crisis, with the most significant spending cuts made in clothing/footwear, catering/ entertainment and food stuff/beverages. Loans Credit Cards A major problem for households in the Thessaloniki Prefecture, according to the survey, is the repayment of various obligations to banks. More specifically, one in seven households in 8

9 the Prefecture of Thessaloniki (14%) stated that it is unable to repay mortgage loans and has similar trouble repaying consumer loans (8%). Finally, almost 1 in 10 consumers say they cannot afford to repay their credit cards. 9

10 7. TCCI BAROMETER AD HOC BUSINESSES QUESTIONS All businesses that participated in this survey have been asked common questions regarding the reduction of employer contributions planned for the summer of 2014, the liquidity needs of any kind (working capital, fixed assets, and letters of guarantee), the requests/approvals of business loans, overdue debts to government entities and tax returns (income, VAT etc). Employer contributions reduction Only 27% of businesses in the prefecture of Thessaloniki consider that the reduction in employers' contributions announced and effective from the summer of 2014, will help their business "a lot" (8%) or "somewhat" (19%). In contrast, the vast majority (58%) said that the measure will help their business "a little" (32%) or "not at all" (26%). Provision of liquidity - Business Loans Only 15% of businesses say that there is no need to provide liquidity as working capital over the next six months, while 37% have no need for liquidity for investments/assets and 69% have no need for liquidity for letters of guarantee, over the next six months. 1 in 10 businesses (9%) in the Prefecture of Thessaloniki say that they have applied for a business loan during Among these, 89% requested a loan for working capital, 19% requested a loan for investment or purchase of assets and only 8% requested a loan for the issuance of letters of guarantee. The percentages of loans approved vary from 47% for working capital, 25% for investments/assets and 40% for letters of guarantee. The percentage of coverage for the amount of the loan requested ranges from 70% for investments/assets, 85% for working capital and 100% for letters of guarantee. Overdue debts to State entities Tax returns 1 in 4 businesses (25%) in the Prefecture of Thessaloniki indicate that they carry overdue debts to State entities. Among these, 42% ought to the National Social Security Organization (IKA), 64% ought to the Self-Employed Insurance Agency (OAEE) or another insurance fund, 45% ought to VAT and 40% have other tax debts. At the same time, 1 in 5 (19%) of businesses in the Prefecture of Thessaloniki say they are entitled to some kind of tax refund, with the majority of those entitled to a refund of VAT (76%) and a smaller percentage entitled to a refund of income tax (28%). Thessaloniki, April 8 th,