Business climate improves in Greece, survey shows

According to a survey conducted by the National Bank in Greece, small and medium enterprises (SMEs) have overall confidence about the future and positive expectations about future demand for the first time since the financial crisis began.

The survey shows the confidence index (the difference between the percentage of respondents with positive and negative expectations) at +2 for the first half of 2014, a 37-point turnaround from the low point in the first half of 2012 (-35) and a 13 point improvement over the second half of 2013 (-11).

The confidence stems from an expected increase in demand: while the current demand trend index (the difference between those who said demand was higher in the period surveyed versus those who said it was lower) stood at -10, the future demand index was +16, a 27-point improvement over the second half of 2013 and a 56-point turnaround from the lows of the first half of 2012.

The most confident businesses businesses are those in the food, tourism and transport sectors.

However, the survey underlines that the majority of small companies suffer from low liquidity.

In particular, small enterprises have identified three key barriers for their financial recovery:

(i) Institutional rigidities like high bureaucracy and customs glitches,

(ii) Difficult environment in Greek trade flows (both in terms of the domestic economy and in terms of exports) and

(iii) Weaknesses in network marketing and transport infrastructure.

The survey was based on a sample of 1,100 Greek SMEs.

National Bank of Greece, ANA-MPA

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