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ΕΜΠΟΡΙΚΟ & ΒΙΟΜΗΧΑΝΙΚΟ ΕΠΙΜΕΛΗΤΗΡΙΟ ΘΕΣΣΑΛΟΝΙΚΗΣ - Ε.Β.Ε.Θ ΕΜΠΟΡΙΚΟ & ΒΙΟΜΗΧΑΝΙΚΟ ΕΠΙΜΕΛΗΤΗΡΙΟ ΘΕΣΣΑΛΟΝΙΚΗΣ - Ε.Β.Ε.Θ

22o TCCI BAROMETER

04/11/19 14:49

“TCCI BAROMETER” (Executive Summary)

Thessaloniki Chamber of Commerce and Industry (TCCI), consistent to its efforts to increase information levels and inform both businesses and organizations (public or private) as well as Thessaloniki’s community, continues the periodic Survey of Economic Climate (at the Prefecture of Thessaloniki) on the four business sectors of the economy and consumers.

The Survey of Economic Climate at the Prefecture of Thessaloniki (TCCI Barometer) is conducted twice a year during the 2nd fortnight of March and September, with a total sample of 1500 respondents (800 companies and 700 consumers). The survey covers all four sectors of the economy (industry, services, retail trade and constructions).

TCCI Barometer” survey is conducted via telephone interviews with the managers of businesses (General Managers, or Finance Managers, or Sales Managers or the owners in case of “smaller” companies) and with the use of questionnaires used by the Foundation for Economic & Industrial Research and the European Union, so that the results are comparable with the equivalent National and European surveys.

1.CONSUMER SURVEY

The “Consumer Confidence Indicator” is calculated based on consumer’s predictions for the general economic situation of the country, the economic situation of their household, the intention for saving and their prediction for unemployment levels. It must be mentioned that predictions are between +100 (all consumers anticipate an increase) to -100 (all consumers anticipate a decrease) and appear as differences between positive and negative responses. In particular, a negative difference means that the percentage of those who predict a decrease is higher than the one of those who predict an increase and vice – versa.

According to the survey, consumers at the Prefecture of Thessaloniki have abandoned the stable pessimism of the past decade and currently the Consumer Confidence Indicator stands at -2 points – showing a remarkable improvement compared to March 2019 – and at a higher level than the corresponding National Indicator, which stands at -7 points, while the European Union one stands at -6 points for September 2019. Compared to last March 2019, a remarkable improvement in the climate among consumers at the Prefecture of Thessaloniki is observed (-2 from -23), as well as an equally remarkable improvement of the climate at a National level (-7 from -31).

The survey shows a decline in pessimism among consumers, as the Consumer Confidence Indicator has risen at almost the best level of the last 10 years since the launch of the TCCI Barometer. It should be stressed that at this specific point, various positive records are being broken as far as the Consumer Confidence Indicator is concerned: on one hand it has reached the highest value  ever recorded since the beginning of the “TCCI Barometer” survey and on the other hand it stands, for the first time, even higher than the European Indicator (-2 against -6 respectively). This remarkable climate improvement in local as well as in national level reflects the general euphoria that followed the results of the National Elections of July and is in line with the stable improvement of the climate between consumers that has been recorded since September 2017. Moreover, the tax relief measures that the government has already adopted or has announced in advance for the near future, as is documented from the answers of the ad-hoc questions of September’s 2019 survey, are widely approved and accepted by the citizens and give an even bigger optimism boost (or better, a reduction in pessimism levels), resulting in the Consumer Confidence Indicator reaching a neutral level, a fact that practically indicates that pessimistic citizens are almost as many as the optimistic ones. Looking more closely each individual Indicator, it is clear that this climate improvement tendency is mainly due to the optimism that is recorded as far as the future course of the country’s economic situation is concerned, as well as the future course of each household’s economic situation. This optimism trend also leads to an improved sentiment that this is a better time for households investing in important purchases and saving money, although still in negative levels. Moreover, consumers are still cautious in buying and/or building a house/apartment or buying a car.

In particular, consumers at the Prefecture of Thessaloniki indicate:

  • Less negative evaluation of their economic situation for the preceding period, followed by a significant reduction of pessimism (compared to March 2019) regarding the foreseeable future, since there is a remarkable increase in the percentage of those who expect an improvement of their economic situation (from 17% in March 2019 to 32% at present), while the majority (49%) predict economic stability for the next 12 months, with a clear reduction of the percentage of those who expect a deterioration (12% compared to 25% last March).                                                
  • Significantly less negative views as far as the country’s economic situation over the past year is concerned (18% from 54% last March) and significantly more positive evaluations (27% from 13% in March). At the same time, a significant increase in the percentage of those who report stability for the last 12 months is recorded (51% from 31% in March 2019). There’s also a positive change observed as far as the evaluations of the country’s general economic situation over the next year  is concerned,  with a big increase in positive predictions (51% over 20% in March 2019).
  • Consumers in the Prefecture of Thessaloniki mention that prices have been stabilized during the past 12 months (44% from 25% last March), while the percentage of those who detect some increase in prices has reduced down to 47% from 70% last March. They also expect that this stability trend will continue over the next 12 months. Moreover, there is a remarkable reduction in the percentage of those who believe that consumer prices will rise with a small, medium or high pace over the next 12 months (39% versus 55% last March).
  • Reduced pessimism is recorded as far as unemployment levels are concerned, since the majority of respondents believe that unemployment numbers will decrease “A lot” or “Somewhat” (40% compared to 26% in March 2019), while at the same time there is a reduced percentage of those who believe that unemployment levels will rise over the next 12 months (28% compared to 40% last March). 
  • There is a remarkable improvement of consumer’s evaluation of current circumstances to make major purchases (18% considers that this is an appropriate time for important purchases such as furniture, electric appliances etc., compared to 8% on March 2019), still remaining, however, in negative ground and there is also a slight improvement recorded to their willingness to make such purchases in the future.
  • A constantly low intention to save is reported, however, compared to March 2019 an important increase in the percentage of those who save money (more” or “less”) is recorded (25% from 17%), while there is a simultaneous decrease in the number of those who say they live at the expense of their savings or borrow money (22% from 33%) and an increase (53%) of those who say that they just break even with their income (49% in March 2019).
  • A slight upward trend is expected over the next few months as far as the car market is concerned in the Prefecture of Thessaloniki, with 9% of the consumers saying that it is very or highly likely to make a car purchase (7% in March 2019).
  • A constantly negative situation in both the real estate market and the construction activity in general. However, there are signs of improvement as far as renovations and / or repairs-house improvements are concerned, where the corresponding indicator continues its slight improvement (19% over 14% last March).

 

2.INDUSTRY SURVEY

The “Business Expectations Indicator for the Industrial Sector” at the Prefecture of Thessaloniki stands at a marginally negative level, slightly reduced compared to March 2019. Slight changes are shown in the corresponding National and – more intensely – in the European Indicators.

It must be emphasized that the deindustrialization of the Prefecture of Thessaloniki and the transfer of many businesses of this sector in neighboring countries in recent years, has made difficult even the completion of the survey’s sample required.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Industrial Sector” stands now at -2 points at the Prefecture of Thessaloniki (+1 at National and -10 at European level). It should be noted that this indicator, which constantly records fluctuations every half year since September 2017, shows a slight deterioration since March 2019 at National level (-2 from +2) and a more obvious deterioration at a European level (-10 from -2).

The Business Expectations Indicator for the Industrial Sector over the last year appears to “flirt” with positive ground, moving away from the negative numbers that were consistently recorded from 2009 up to 2016-2017. However, mixed trends are observed in the survey. Evaluations of production and order levels for the previous six months show an upward trend compared to the results of the March 2019 survey, while expectations regarding the evolution of both production and exports in the near future remain in clearly positive levels. It should be noted that the evaluations for the evolution of exports over the next 6 months continue their upward trend, setting for the second continuous semester a new highest value since the beginning of the “TCCI Barometer” surveys

In particular, the views of the industrial sector at the Prefecture of Thessaloniki are summarized as follows:

  • There is a significant improvement in production (+7 from -5) over the past 6 months, with the corresponding indicator appearing in positive levels again since September 2018. Estimates regarding the evolution of production in the near future at the Prefecture of Thessaloniki, are once again at positive ground, in a lower, however, level compared to the previous semester (+21 from +35 in March 2019).
  • Relatively good management of inventories and production capacity is achieved. At the same time, the current production capacity level reached its highest level since the beginning of the “TCCI Barometer” survey (72%).
  • Significant optimism for the future as far as the exports are regarded, reaching an even higher level (+34 from +32 last March), the highest recorded since “TCCI Barometer” launch in 2009.
  • Relatively constant product prices are expected for the near future, as well as relative stability as far as employment is concerned over the near future.
  1. SERVICES SURVEY

A highly remarkable change is reported in the climate recorded by the service businesses at the Prefecture of Thessaloniki compared to March 2019, with the “Business Expectations Indicator for the Services sector” climbing for the first time since the beginning of the “TCCI Barometer” survey in positive ground and with a relatively high value.

More specifically, the relevant “Business Expectations Indicator for the Services Sector” is recorded at positive ground (+21 points), whereas in the previous semester it stand at -3 points and have been continuously recorded at negative ground since the beginning of the “TCCI Barometer” in March 2009. The corresponding National indicator is also improving (+20 compared to +11 last March 2019), while the European indicator continues its one-and-a-half year downward trend (+5 from +8 in March 2019).

In particular, services companies at the Prefecture of Thessaloniki mention:

 

  • Remarkable improvement as far as their business performance is concerned (+4 today compared to -21 last March), as well as their demand during the preceding six months (from -11 last March to +15 today).
  • A takeoff in demand expectations for the next six months, reaching the highest value ever recorded over the past decade (+45 compared to +23 on March 2019).
  • There is also a positive expectation as far as employment is concerned, with a considerable improvement since March 2019, while price levels follow the upward trend that started in September 2015 and keep being reported in every “TCCI Barometer” survey ever since. In addition, for the first time since the launch of the “TCCI Barometer” survey, a barely noticeable but existing expectation for price levels rise is recorded.

 

4.RETAIL TRADE SURVEY

A highly remarkable change is reported in the climate among Retail businesses at the Prefecture of Thessaloniki, compared to March 2019, with the “Business Expectations Indicator for the Retail Trade sector” climbing at positive ground, for the first time since the launch of the “TCCI Barometer” survey.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Retail Trade sector” stands at +8 points (from -10 in March 2019). Even more impressive is the improvement of the corresponding indicator at National level (+33 points from +7 in March 2019), while on the other hand the European indicator shows a slight deterioration, dropping at negative ground (-2 points from +2 points in March 2019).

In particular, the views of Retail businesses at the Prefecture of Thessaloniki can be summarized as follows:

  • A steadily negative, but clearly improved evaluation (-13 from -38 in March 2019) is observed about sales during the past six months, while expectations about sales in the next six months appear significantly improved (+21 from +4 in March 2019). In addition, significantly positive expectations are observed as far as orders are concerned for the next six months, standing for the first time since the launch of the “TCCI Barometer” at positive ground (+8 points from -6 in March 2019).
  • Moreover, they foresee a slight increase in the employment levels in their sector and stability as far as product prices are concerned in the near future.

 

5.CONSTRUCTION SURVEY

A continuing upward trend with a further reduction of the pessimism in the Construction sector is recorded, where the “Business Expectations Indicator for the Construction Sector”  in the Prefecture of Thessaloniki is slightly improved, remaining for another semester in higher levels than that of the National corresponding indicator.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Construction Sector” stands at -22 points at the Prefecture of Thessaloniki (compared to -26 in March 2019), -56 points at National level (compared to -48 last March) and 0 points at European level (in comparison to +4 last March).

A very clear improvement of the construction activity indicator is recorded, rising for the first time in the history of the “TCCI Barometer” at positive ground.

 
In particular, the views of Construction businesses at the Prefecture of Thessaloniki can be summarized as follows:

  • Significant improvement of the construction activity indicator over the last six months (reaching +8 points today compared to -11 points in March 2019 and rising at positive grounds for the first time).
  • A stabilization trend appears as far as the current levels of orders in the Construction sector are concerned.
  • An upward trend appears in both real estate prices and employment levels over the next 6 months (where for the first time in the history of the “TCCI Barometer” there is an expectation for increase in prices).

 

6.TCCI Barometer – AD HOC CONSUMER QUESTION

Aiming at the optimum use of "TCCI Barometer" as a research tool with a view to better inform the business community of Thessaloniki, new ad-hoc questions were incorporated in “TCCI Barometer’s” questionnaires. The questions were placed at the end of standardized questionnaires used "TCCI Barometer" to ensure continuity and reliability of the results of "TCCI Barometer".

  • Economic Policy of the newly elected Government

In the context TCCI Barometer survey, respondents were asked to evaluate the economic policy and tax relief measures that were announced by the new Government. According to the survey, the majority of the consumers (53%) in the Prefecture of Thessaloniki report that the new government’s economic policy is towards the right direction, whereas only 15% of respondents say it’s towards the wrong direction and 14% express a neutral view. It should be noted that almost 1 out of 5 respondents (18%) either has no opinion or feel unable to evaluate the economic policy of the new government.

  • Tax Relief Announcements

As far as tax relief measures announced by the new government are concerned, more than half (55%) of the consumers in the Prefecture of Thessaloniki consider them to be “Very” (21%) or “Somewhat” (34%) important for themselves and their families, compared to 39% who consider them to be “A Little” (24%) or “Not at all” (15%) important.

  • Major Infrastructure Projects in Thessaloniki

The completion and reconstruction of the Ring Road of Thessaloniki is considered to be the most important infrastructure project, both for the city of Thessaloniki as well as for it’s citizens’ lives, according to the responses in the consumer survey. More specifically, in a scale ranging from 1 – “Not at all important” up to 5 – “Very important”, the completion/reconstruction of the Ring Road of Thessaloniki is rated at 4.7/5 (concerning its significance for the city of Thessaloniki) and 4.3/5 (concerning its significance for the residents’ lives). Remarkably high value is given by the residents of Thessaloniki on the expansion project and the completion of the new facilities of “Macedonia” Airport (4.6/5 and 3.6/5 respectively). The completion of the Thessaloniki Metro project, a topic currently in the center of attention in Thessaloniki, is ranked third concerning significance for the city and second (along with the expansion and completion of the new “Macedonia” Airport facilities) concerning the significance for citizens’ lives, with 4.4/5 and 3.6/5 respectively. Subsequently, the completion of the Alexander Innovation Zone facilities follows (with 4.1/5 and 3.3/5 respectively, but with a considerable percentage of the respondents 57-58% not having an opinion about the project), as well as the redevelopment/refurbishment of the Thessaloniki International Fair facilities and the construction of a new Exhibition Center (with 4.0/5 and 3.0/5 respectively). It is very important to notice, though, that all the above mentioned major infrastructure projects are considered very important for the city, with rankings ranging between 4.0/5 and 4.7/5.

  • Major Problems of the Urban Environment of Thessaloniki

The condition of the public transport services of Thessaloniki is the topic that mostly concerns the citizens of Thessaloniki, as far as the urban environment of the city is concerned, as it is mentioned by a total of 6 out of 10 respondents (59%), while 4 out of 10 (38%) consider this as the first – most important problem. The cleanliness of public areas and spaces (49% in total and 20% as the first – most important problem) and traffic (47% in total and 29% as the first – most important problem) follow and complete the top-three list of the major problems reported by the Prefecture of Thessaloniki citizens. Quite far below in the list stands the completion of Thessaloniki Metro (21% in total and 7% as the first – most important problem).

7.TCCI Barometer – AD HOC ENTERPRISES QUESTIONS

  •  Investment Climate

In the context of the TCCI Barometer, businesses were asked to evaluate the investment climate in the country. Responses seem rather equally distributed, since 29% consider the investment climate to be positive, as opposed to 31% that consider it to be negative, while 36% of the businesses consider the climate being neither negative nor positive. Moreover, the majority (40%) consider that investment climate in the country has been improved compared to the previous year (with only 12% stating that is has deteriorated) and 57% expect further improvement of the investment climate in the country over the next year (compared to just 9% that expect deterioration). It should be underlined, that in the same question of the TCCI Barometer two years ago (September 2017), the investment climate was considered positive by just 4% of the businesses, while 78% considered the investment climate to be negative. There is, thus, a remarkable improvement of the businesses’ sentiment as far as the investment climate is concerned in comparison to 2017. Finally, 30% of the businesses in the Prefecture of Thessaloniki say that they plan to invest in Greece over the next 12 months, while the corresponding percentage in 2017 was 22%. As for the most important reasons that prevent businesses from investing in the country, the two main responses are: high taxation (49%) and the uncertainty of the economic/business environment (33%).

  • Major Infrastructure Projects in Thessaloniki

The completion and reconstruction of Thessaloniki’s Ring Road is also considered the most important project among businesses in the Prefecture of Thessaloniki, both as far as the city is concerned as well as for the businesses themselves, according to the answers given participating businesses. More specifically, in a scale from 1 – “Not at all important” up to 5 – “Very important”, the completion/reconstruction of the Ring Road of Thessaloniki is rated at 4.6/5 (concerning its significance for the city) and 3.8/5 (concerning its importance for the businesses themselves). Remarkably high value is also allocated at the expansion project and completion of the new facilities of the “Macedonia” Airport (4.6/5 and 3.1/5 respectively). The completion of the Metro of Thessaloniki is ranked third as far as the city is concerned but last as far as businesses are concerned, with 4.4/5 and 2.7/5 respectively, while almost equally important are considered the completion of the Alexander Innovation Zone facilities (with 4.1/5 and 2.9/5 respectively, but with a considerable percentage (52-53%) of respondents not having an opinion about the project) and the redevelopment/ refurbishment of the Thessaloniki International Fair facilities and the construction of a new Exhibition Center (with 4.0/5 and 2.8/5 respectively). It is very important to notice once again that all the major infrastructure projects are considered very important for the city by the Prefecture of Thessaloniki businesses, with rankings ranging between 4.0/5 and 4.6/5.

  • Major Problems of the Urban Environment of Thessaloniki

The condition of the public transport services and the traffic situation of Thessaloniki are equally ranked first among the major problems, as far as the urban environment of the city is concerned, according to the businesses of the Prefecture of Thessaloniki, as 5 out of 10 businesses refer to those problems (50% and 51% respectively), while 3 out of 10 (31%) refer to those as the first – most important problems. The cleanliness of public areas and spaces (36% in total and 15% as the first – most important problem) and the completion of the Thessaloniki Metro (26% in total and 12% as the first – most important problem) follow through to complete the top-four list of the problems reported by the businesses in the Prefecture of Thessaloniki.

Thessaloniki, October 10th, 2019

PALMOS ANALYSIS

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