Entrepreneurs Do Not Expect Significant Reforms or Improvement in Business Climate – Research

The research conducted by the Croatian Chamber of Economy (HGK) “Business Expectations” shows that domestic entrepreneurs do not expect significant changes in business operations in the second half of this year, and they are moderately optimistic regarding revenue generation.

As stated by HGK on Wednesday, Croatian entrepreneurs do not expect significant changes in business operations in the second half of 2018.

“On one hand, this can be taken as a good indicator that the state of the economy has stabilized in a slightly positive trend, but on the other hand, it indicates that entrepreneurs do not expect serious reforms or improvement in the business climate,” they assess at HGK.

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Regarding revenue generation, entrepreneurs are moderately optimistic – nearly half of the respondents expect the same revenue in the next six months (46 percent), while the percentage of those expecting revenue growth is twice as high (36 percent) as those expecting lower revenues (18 percent).

Of the total number of companies that participated in the survey, 45 percent are exporters, the vast majority of whom expect that revenues in foreign markets will be higher or at the same level in the next six months. Such forecasts are based on stable growth in the EU as the most significant market, but also on generally favorable global trends, HGK states.

Regarding investments in the next six months, 49 percent of companies expect stagnation, 22 percent expect an increase in their investment activities, and 29 percent expect a decrease.

More than two-thirds of entrepreneurs do not expect an increase in the number of employees, while 20 percent do expect a certain increase in employment.

The majority of companies do not expect significant changes in general business conditions in the next six months (60 percent), which may also be caused by the lack of announcements of new reforms that would influence better business expectations for entrepreneurs, HGK says. Entrepreneurs do not expect significant fluctuations regarding access to financing and exchange rates, they add.

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Among the factors that will positively impact business, the majority of respondents highlighted further growth in foreign and domestic demand, while energy/raw material prices, labor availability, judiciary, tax system, and public administration are most prominently cited as factors with a negative impact.

“The conclusions of the research conducted by HGK twice a year indicate that entrepreneurs do not expect significant changes regarding general business conditions and investments, and their optimism regarding revenue is based on the growth of domestic and foreign demand. This is, among other things, a message to institutions to continue with reforms in order to maximize the currently positive trends in the domestic economy and at the EU level,” it is further stated in the announcement.