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Directors of Croatian Companies the Most Pessimistic in the Region

Two-thirds of directors of Croatian companies believe that general economic conditions will worsen in the next six months, while one-fifth of them have a negative outlook on the future of their companies, making them the most pessimistic in the region, according to the survey “Indicator of Attitudes in the Business Sector” conducted by the consulting and auditing firm Deloitte in six Central European countries.

A significant increase in optimism in Croatia was recorded only regarding spending on capital goods (equipment, IT systems, new office buildings, etc.), with nearly half of the respondents stating that they will increase capital investments in the next six months, while only ten percent believe they will decrease them. Expectations regarding employment in the region and in Croatia remain negative. Forty-four percent of Croatian directors expect a reduction in the number of employees in their companies, while only seven percent plan to increase the number of employees.

Although their colleagues in the region expect an increase in sales revenue in the next six months, approximately three-quarters of directors of companies in Croatia believe that sales revenues will not change or will decrease. In Croatia, the results of the survey show that the assessment of the risk of non-collection of receivables has significantly worsened in the last nine months. Thus, more than three-quarters of directors in Croatian companies believe that it takes excessively long to collect receivables.

On the other hand, directors in Croatian companies are equally optimistic about the availability of credit as their colleagues in other countries in the region. There are three times more who believe in the availability of credit than those who show pessimism in this regard. Surveyed directors in Croatia assess the prospects for acquiring another company as small, but within the Central European average. Only 13 percent of them would dare to take that step in the next year, according to Deloitte’s research.

Deloitte’s analysis was conducted on a sample of 200 respondents, chief or financial directors in the largest companies from six Central European countries – Croatia, Poland, the Czech Republic, Slovakia, Hungary, and Romania. The survey, which was conducted for the first time for the first quarter of 2009, includes the automotive industry, banking, insurance, technology, media and telecommunications, the consumer goods sector, transport, construction, and energy and resources. (H)