Croatian Business Leaders Remain the Most Pessimistic in Central Europe

Business people across Central Europe remain cautious, but their optimism regarding the economic recovery of the region is continuously growing, according to the results of a survey conducted by the consulting and auditing firm Deloitte.

Croatian directors continue to lead in pessimism regarding the economic outlook, with 57 percent believing that the economic situation in the country will worsen in the next six months. On the other hand, it is important to mention that 17 percent of leading figures in Croatian companies believe that business conditions in our country will improve, whereas just a year ago, not a single respondent expected improvement. Interestingly, the attitude of directors regarding the financial prospects of their companies is far more positive than their view of the economic outlook in the country where their company operates. This trend is most noticeable in Croatia, where as many as 40 percent of directors believe that their company’s prospects are positive. Only 13 percent expressed a negative stance on this issue.

– Since the first survey conducted by Deloitte in September 2009, a continuous increase in optimism has been visible across the region. Poland, as the only European Union country whose economy was not in recession last year, continues to lead in positive trends. Strong positive trends are also visible in the Czech Republic and Slovakia, while in countries with weaker macroeconomic indicators such as Hungary, Romania, or Croatia, a positive but significantly slower shift is also noticeable, emphasized Slaven Ćurić, a manager in the Financial Advisory Department at Deloitte. As many as 78 percent of respondents believe that sources of financing are currently available to their companies, which is almost twice as positive as a year ago. The result for Croatia is close to the average, as 73 percent of directors believe that loans are relatively accessible to them. Optimism among our directors regarding debt collection is also growing, with 40 percent of respondents now confident in their ability to collect their receivables. However, Croatia still leads in pessimism regarding sales revenue, as nearly one-quarter of respondents (23 percent) forecast a further decline in the next 12 months. This is significantly below the Central European average of 15 percent pessimistic responses.

Our directors are, however, more optimistic about the possibility of launching new products and services, with as many as 63 percent believing that the outlook in this regard is positive. Unfortunately, the smallest number of optimistic responses from Croatian directors in the survey was recorded regarding the possibility of increasing the number of employees in their company. Only 10 percent of leading figures believe that their company will increase its number of employees. However, the good news is that the majority of directors (60 percent) still believe that the number of employees will remain relatively stable, which means we should not expect new mass layoffs. Compared to the previous quarter, Croatia is experiencing a negative trend in attitudes regarding capital investments. The share of optimists in our country has fallen from 47 to just 23 percent, unlike some other countries, such as Poland, where a convincing majority of business leaders expect significant increases in capital investments. “Although it has been assessed that the availability of credit funds has increased, it is indicative to note that Croatian directors are not ready for new investments, which still shows a predominantly negative business sentiment,” emphasizes Ćurić. The climate for mergers and acquisitions of new companies across Central Europe, the research shows, is still not positive. On average, 43 percent of respondents consider it extremely unlikely that they will embark on acquiring a company in the next year. In Croatia, this percentage is much lower, with only 20 percent of directors considering expanding their business through mergers and acquisitions. (M.N.)