On the 12th of December 2022, BIA presented the results of its traditional online survey to the members of the Association, conducted in the period 5 November - 1 December 2022 among 796 micro, small, medium and large enterprises from across the country and from all sectors of the economy.
The survey is being conducted for the 18th consecutive year and the aim is to examine the state of business in the current macroeconomic conditions. The main topics are related to the impact of the political processes in international and national aspect on the business in Bulgaria, as well as the business planning for the next calendar year. This year, special emphasis is placed on the impact on business of the energy crisis and the war in Ukraine. .
Assessments
Participants in the survey gave an overwhelmingly negative assessment of both the state of the business climate and the state of their own companies. Compared to the previous year there is barely noticeable optimism in the assessments, but the effects of the crisis are highly visible.
Prognosis
In last year's BIA survey, the most serious concerns of the respondents were regarding the expectations for a drastic increase in the prices of energy resources and raw materials, and inflation - both on a national and global scale. Unfortunately, these predictions have come true, and this is the main reason why the faint optimism of the end of 2021 has disappeared. A year later, again the attitudes of the business are more for the preservation or deterioration of the economic indicators than for positive development.
The majority of respondents see the risks to the development of the Bulgarian economy in the expected rise in prices, the fiscal and regulatory burden, and inflation. The concerns of business are mainly rooted in the ongoing (and with an unforeseeable ending in time) economic and energy crisis, provoked above all by the military conflict in Ukraine, and on a national level, a problem is created by political turbulence, which brings with it instability and ambiguity, an inability to predictability and planning.
Obstacles
As the biggest obstacles to business, the respondents indicated the lack of labor and frequently changing regulations, followed by bureaucracy, regulatory burden and the lack of e-government.
For the majority of respondents, the high prices of raw materials, materials and energy resources create serious problems, which forces them to increase the final prices of their products and cut costs.
Plans to increase the minimum wage have the greatest impact on inflationary processes - almost half of the respondents stated that they would calculate this additional cost to the prices of goods and services.
Performance of companies
The numerous crises that have accumulated over the past 2-3 years have inevitably had an impact on the companies' indicators, all of which marked drastic declines compared to the pre-crisis 2019. Production and sales volumes, as well as foreign markets, are decreasing. The least affected are salaries, which in 2022 will increase in 76% of companies.
Good news
On a positive note, there has been a slight improvement in the decline in production and sales this year compared to 2021. There has also been an improvement in investment, including in human resources, new products and new capacity.
The group of good news also includes the decrease in liabilities to financial institutions and the budget, but liabilities to counterparties and personnel are increasing. Along with this, the cases of overdue uncollected receivables from counterparties are seriously reduced. The supposed reason for this is the stricter financial discipline introduced in the crisis.
In the last three years, the interest in participating in public procurement has decreased compared to the previous periods, and in 2022 only 14% of the respondents participated in similar competitions. The reduction of improper/illegal practices in the field of public procurement should be noted, especially the serious decrease in unfounded appeals, subcontracting and delayed payments by contracting authorities.
Among the positive conclusions should be added the increase in the share of respondents who approve of Bulgaria's accession to the Eurozone. Awareness regarding the National Recovery and Sustainability Plan and the European Green Pact is also growing.
Plans
The expectation of a rise in prices and, more specifically, the cost of labor, makes most employers (67%) include in their plans for 2023 an increase in wages.
In response to the economic crisis, almost half of the respondents (48%) plan to increase the volume of their production, as well as the range of products/services offered.
Among the business priorities for 2023 are the search for new markets, investments in energy-saving technologies and staff development/training.
In the conditions of unclear prospects, business retains a high degree of pessimism, therefore its expectations and plans for the future are too cautious and subject to pragmatism.
