Small and medium-sized enterprises appear more optimistic in the first half of 2023 compared to the previous half, according to information from APE-MPE on the findings of the six-monthly survey of GSEBEE, while in terms of liquidity and cash reserves, from the mapping it follows that companies in island regions present a better image, while catering companies seem to face the most serious problem.

From the responses elaborated by the General Confederation of Professional Craft Merchants of Greece (GSEVEE) in the context of the six-monthly survey that it has been carrying out since 2009, it appears that the full opening of the economy, the good tourist season and the support measures implemented were the factors for the further rise of the positive climate.

According to the data, the Economic Climate Index of small and very small businesses strengthened further in the second half of 2022 and stood at 69.5 points, being the highest performance recorded in a climate survey of IME GSEVEE.

According to the data, the expectations of Greek SMEs, after 2 months of decline, are increasing. In particular, and with regard to the first half of 2023, the SME expectations index, which consists of the sum of positive and stable expectations, increases to 66.5 points, without however approaching the pre-pandemic levels, which is interpreted as a product of the wider uncertainty that dominates.

However, as far as the uncertainty and sustainability indicators are concerned, the uncertainty index of small and very small businesses shows a significant decline of about 10 points, approaching the pre-pandemic level. Specifically, 28.7% express fear of a possible interruption of their activity in the future, while the viability index also shows a decline as it falls to 3.6% (from 6.5% in the previous semester) of businesses that are at immediate risk of a lockout.

It is noted that the survey is the first for 2023 conducted by the Small Business Institute of GSEVEE on a six-monthly basis. The survey was carried out by the MARC company on a nationwide sample of 804 small and very small businesses (0-49 employees), between January 27 and February 15, 2023.

Operations’ Circle

The turnover, according to the information of the APE-MPE on the findings of the research, in the second half of 2022 can be characterized as balanced as the percentage of companies that declared that they had an increase is exactly the same as those that declared a decrease (33, 3%), while 32.1% stated that it did not change.

For the companies that declared an increase in turnover (33.3%) the average increase was 18.8%, while for the companies that declared a decrease in turnover (33.3%) the average decrease was 27.4%.

The picture appears better for manufacturing and services and clearly worse for trade, while the largest enterprises that declared an increase in turnover are proportionately more than the smaller ones, while the reverse applies to those that declared a decrease.

Demand – Orders to suppliers

36.4% of small and micro businesses said demand increased in the second half of 2022, 32.3% said it remained the same, while 31.2% said it decreased.

Larger companies as well as those belonging to island regions present a better picture compared to the rest of the companies in terms of demand.

In addition, 30.5% of small and very small businesses reported an increase in orders to suppliers in the second half of 2022, 33.2% said they were unchanged, while 35.7% reduced their orders.

Liquidity – Cash available

41.5% of small and very small businesses stated a decrease in their liquidity in contrast to 25.6% who stated an increase and the largest businesses are the ones that present much better data than the smaller businesses while the businesses in island regions.

In the meantime, the cash-flow situation remains particularly difficult for a very large part of small and micro-enterprises.

28% of the companies have zero cash available and for 22.4% of the companies the cash available is sufficient for at most one month.

It is noted that the biggest liquidity problems are faced by the smallest – based on the number of employees and the turnover – companies, while a very serious problem is faced by catering companies where the percentage of those who do not have cash available or the cash available is sufficient for a month at most amounts to at 58.8%.

Employment

The hiring-dismissal balance is positive for all sectors with 9.3% of businesses reporting an increase in staff in the second half of 2022 against 7.6% reporting a decrease.

Estimates for the first half of 2023 appeared positive as 16.1% of businesses said they would hire staff compared to 4% who said they would reduce.

Investments

More than 1 in 3 small and micro businesses (36.8%) made some form of investment in the second half of 2022. Overall investments are up compared to the previous half’s survey (29.8%).

21.6% made investments in technological equipment and digital technologies, 20.5% in mechanical equipment and other machinery, 10.8% in building facilities and other equipment and 9.2% in staff training and education.

It is estimated that there is a clear positive relationship between the companies that declared that they have made investments and their size in terms of number of employees and turnover.

It is noted that, despite the increased percentages of companies that declared that they had made investments, these were small-scale. For 1 in 2 companies (51.7%) that made investments, the amount of the investment was up to 5,000 euros.

The problem of access to financing for investments remains acute with 8 out of 10 companies (80.5%) that have made investments having financed them with their own resources. 11.4% financed them through financing programs while only 3.9% through bank loans.

Prices

49.1% of small and very small businesses stated that they increased their prices in the second half of 2022. It is underlined that, although this percentage is reduced compared to the first half of the year (59.2%), it is considered extremely high.

The largest percentages of companies that said they increased their prices are found in the largest companies. Specifically, 64% of businesses with a turnover of more than 300,000 euros and 58.6% of businesses with more than 5 employees stated that they increased prices, while the corresponding percentages for businesses with a turnover of up to 50,000 euros and no staff are 33. 9% and 38.7% respectively. At the sectoral level, we had clearly smaller percentages of companies that increased their prices in the service sectors (36.7%) compared to companies in manufacturing (57.9%) and trade (56.1%).

Effects of revaluations

The negative effects of revaluations on the operating costs of businesses that were recorded in the 2 previous surveys of IME GSEVEE continue but with a significantly reduced intensity.

In the second half of 2022, the following increased on average: the cost of energy by 53.6%, the cost of the supply of raw materials and goods by 26.4%, the cost of vehicle fuel by 28.8% and the cost of the supply of equipment and machinery by 11.8 %.

Obligations-debts

Overdue debts are also reduced. 36.9% of small and very small businesses have at least one overdue debt, a percentage lower compared not only to previous surveys conducted during the health and energy crisis, but also compared to pre-pandemic data (38, 7% in February 2020).

A decrease is also recorded in the percentages of businesses with multiple overdue debts. In particular, small and very small businesses with 2 or more overdue debts fall to 23% compared to 25.9% in the previous semester. However, the degree of over-indebtedness of small and very small businesses varies according to the sector and the size of the enterprises. Catering businesses seem to be facing the biggest over-indebtedness problem by far, as 38.2% of them have two or more overdue debts. This is followed by businesses without staff (26.8%) and businesses with an annual turnover of up to 50,000 euros (28.8%).

For each category of obligations, the research findings are as follows:

  • 15.3% of small and very small businesses stated that they have overdue debts to the former OAEE,
  • 13.9% stated that they have overdue debts on energy bills,
  • 18% stated that they have overdue debts to suppliers,
  • 15.2% stated that they have overdue debts to the tax office,
  • 11.4% stated that they have rent arrears. It is noted that of the businesses that have rent (66.2% of all businesses), the percentage of businesses that declared that they have rent arrears corresponds to 16.9%.
  • 8.7% stated that they have overdue debts on other bills (water, telephone, etc.),
  • 10.8% stated that they have overdue bank debts. It is noted that of the businesses that have bank loans (45.6% of all businesses), the percentage of businesses that declared they have overdue bank debts corresponds to 23.7%.
  • 7% stated that they have overdue debts to the former IKA.