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

27th “TCCI BAROMETER”

26/04/22 10:22

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.

 

IMPORTANT METHODOLOGICAL NOTE ABOUT TCCI BAROMETER–MARCH/SEPTEMBER 2020 AND MARCH 2021

The consumer and business field surveys at the Prefecture of Thessaloniki, upon which all the TCCI Barometer March 2020 indicators are based, were conducted in the midst of the coronavirus epidemic crisis. More specifically, the Consumer survey was conducted between March 23rd and April 1st, 2020, while the Business survey was conducted between March 23rd and April 7th, 2020.  During this period, all the restraining measures to combat the coronavirus epidemic were put into action and implemented, such as the suspension of operation of both businesses’ and the public sector, as well as the citizens’ restraining of movement. Therefore, the TCCI Barometer of March 2020 indicators, fully reflect the consumer and business climate amidst the coronavirus epidemic crisis. Respectively, the consumer and business field surveys at the Prefecture of Thessaloniki upon which all the TCCI Barometer September 2020 indicators are based, were conducted amidst the second wave of the coronavirus epidemic in Greece, between September 22nd and 30th 2020. Finally, the consumer and business field surveys of the TCCI Barometer for March 2021, were also conducted during the peak of the third wave of the COVID-19 epidemic in Greece, between the 22nd and the 31st March 2021 among consumers and the 30th March and 8th April 2021 among businesses. During this period limitations on civilian’s movements were still in place, retail trade was on hold and alternative modes of work (such as teleworking) were imposed on both the public and the private sector of the economy.  As a result, all the TCCI indicators still reflected, at that time, the serious consequences of the continuous economic crisis that derived from the coronavirus pandemic, both in Greece and worldwide.

National indicators are made up by the consumer and business surveys conducted by the Foundation for Economic and Industrial Research (ΙΟΒΕ), which are part of the common research program funded by the European Union (DG ECFIN) - these results, are used in the calculation of the economic climate indicators in Greece and the rest of the EU countries. Taking the Foundation for Economic and Industrial Research announcement into consideration about the National indicators for March 2020, “it is highlighted that one part of the primary survey was conducted before the implementation of the suspension of operation in specific sectors of the economy and a bigger part of the primary survey was conducted even before the implementation of the citizens’ restraining of transportation. Thus, the indicators’ projection doesn’t entirely incorporate in full-range the developments that occurred during March. Regarding this fact, a further, probably more powerful deterioration of the climate and expectations in general, is possible in the following months”.

Based on the above, it is important to take into consideration that this time difference, though short in days, between the primary research that feeds the National and European indicators and the relevant one of the TCCI Barometer that feeds those of the Thessaloniki Prefecture, renders these indicators incomparable for March 2020, due to the coronavirus crisis developments that occurred during this period, both in Greece as well as in a series of other European countries.

 

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 continue to show intense signs of pessimism, as the combination of the ongoing coronavirus pandemic, the wave of price rises in products and energy as well as the uncertainty caused by the war in Ukraine, create an explosive mixture of insecurity.  As a result the Consumer Confidence Indicator stands at -48 points – with a large 22-point fall compared to “September 2021”.


The survey shows a sharp decline in consumer confidence in the Prefecture of Thessaloniki, a trend that is also observed at both National and European levels. It is characteristic that the indicator of consumer confidence falls even below the level observed in March 2020, with the onset of the pandemic in our country and the conditions of quarantine and suspension of a significant part of economic activity that followed (-45 compared to -48 today) and surely far away from the -2 point level in September 2019 – the best point of the consumer confidence indicator since the beginning of the TCCI Barometer measurements in March 2009. The increase in prices of products and energy and its impact on the disposable income of households is impressive: 31% of those who participated state that they survive at the expense of their savings or by borrowing money (compared to 18% last September), while the percentage of households that say they now have the ability to save more or less decreased to 18% compared to 27% six months ago. At the same time, consumers expect even greater price increases in the near future, while 41% say that increases in products and energy are here to stay and will be permanent. In fact, 1 in 4 households report inability to pay their electricity and heating bills, while 60-65% report difficulty in paying them. Finally, 2 in 3 say they have reduced spending on clothing and footwear, while about 1 in 2 say they have even reduced spending on basic consumer goods, such as food products.

Overall, there is a sharp deterioration in the economic situation of households and the climate among consumers, while the course of slow - but steady - recovery of expectations observed after March 2020 and until the previous semester is now interrupted. Signs of this deterioration are also reflected in the intention - apparently due to financial weakness - to make significant purchases in the next period as well as save money.

 

In particular, consumers at the Prefecture of Thessaloniki report:

  • A very negative evaluation of their economic situation for the preceding period (compared to September 2021) as well as a deep feeling of pessimism about its future development, since there is a remarkable increase in the percentage of those who expect a deterioration of their household’s economic situation over the next months (from 35% in September 2021 to 62% today).                                                       
  • The percentage of those who stated that the country’s general economic situation has (in a smaller or larger degree) deteriorated over the past year, has gone up to 80% (compared to 66% in September 2021). At the same time the percentage of those who estimate that the country’s general economic situation over the next 12 months will deteriorate has also increased (71% today compared to 45% last September 2021).
  • The constant increase in consumer prices has been very pronouncedly felt by almost all consumers, regardless of their financial status.  Consumers in the Prefecture of Thessaloniki estimate that prices have increased during the past 12 months “Slightly” (7%), “Quite” (40%) or “Much” (50%) (97% in total). At the same time the vast majority (81%) of the consumers estimate that over the next 12 months consumer prices will increase at a smaller (11%), same (25%) or higher (48%) rate compared to the previous period.
  • Consumers appear very pessimistic as far as unemployment levels are concerned, as the majority of respondents believe that unemployment levels will increase “A lot” or “Somewhat” (61% compared to 54% in September 2021).
  • A significant deterioration is reported as far as consumer’s evaluation of current situation to make major purchases is concerned (7% considers that this is an appropriate time for important purchases such as furniture, electric appliances etc., compared to 13% in September 2021). The indicator measuring the willingness to make such purchases in the future, has also dropped significantly.
  • A deterioration is also reported in intention to save (14% today compared to 25% in September 2021), while there is a significant increase in the percentage of those who say they live at the expense of their savings or borrow money (31% from 18%), a marginal decrease of those who say that they just break even with their income (50% compared to 54% in September 2021) and a yet more significant decrease of the percentage of those who save money (18%) (as compared to 27% last semester which was the highest value ever recorded since the beginning of the TCCI Barometer surveys on March 2009).
  • The intention to buy a car has also dropped in the Prefecture of Thessaloniki, with 5% of the consumers saying that it is very or highly likely to make a car purchase over the next 12 months (compared to 7% in September 2021).
  • As far as the intention to buy or build a house (3%) and the intention for renovations and / or repairs-house improvements (12%) is concerned things appear to remain stable compared to the results of the six previous months.

 

2.INDUSTRY SURVEY

The “Business Expectations Indicator for the Industrial Sector” at the Prefecture of Thessaloniki has passed again at negative ground for the first time after the positive value recorded in September 2021, disrupting the continuous and impressive increase observed since March 2021.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Industrial Sector” stands now at -11 points at the Prefecture of Thessaloniki. It must be noted that this indicator, reached its worst level on March 2020, since the beginning of the TCCI Barometer surveys in March 2009, but it stood at its highest level since the establishment of the TCCI Barometer in September 2021, following the respective trend of the National and European indicators.

After a two-year period that the Business Expectations Indicator for the Industrial Sector appeared to “flirt” with positive grounds, moving away from the negative numbers that were consistently recorded from 2009 up to 2016-2017, the appearance of the coronavirus epidemic as well as the development and implementation of the restraining measures to combat the pandemic crisis, have led to its downfall at an even worse level in March 2020 than the one recorded during Greece’s recent economic crisis (2010-2011). One-and-a-half years later (September 2021), a significant recovery of the “Business Expectations Indicator for the Industrial Sector” has been observed, which is mainly based on the recovery of the evaluation of the production levels for the past six-month period, the improvement of the production expectations for the next 6-months period, as well as improved expectations for the export levels in the near future. This situation is reversed again today, as both the assessment for the development of production in the previous half and the estimates for the next half fall into negative territory, the assessment of the current level of orders and exports deteriorates significantly, while the estimates for the development of exports in the next period appear marginally positive (compared to the euphoria of the previous semester).

 

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

  • The positive estimates for the development of the production that were observed in September 2021 are dramatically overturned during the last half of the year (-19 from +9), whereas, estimates regarding the evolution of production in the near future at the Prefecture of Thessaloniki, move to a marginally negative ground (-2 from +29 last September).

 

  • There is a satisfying management of inventories and production capacity. At the same time, the current production capacity level, after its significant reduction on March 2020 compared to September 2019 (when it reached the lowest point since the beginning of the TCCI Barometer), has once again recovered to 72% (its highest value since March 2009).  Moreover, the number of assured months of production based on current overall books has decreased at approximately 10% to 3,2 months (3,6 months in September 2021, 2,8 in March 2021 and 2,9 months in September 2020 ) after the plunge at 1,5 months in March 2020 – the worst performance ever recorded since the establishment of the TCCI Barometer.

 

  • Estimates for the future of the level of exports deteriorate significantly in a marginally positive ground (+2 from +22 last semester).

 

  • A significant rise of product prices is expected for the near future (in line with similar trends at National and European level), while the estimates for the development of employment in the next period appear neutral.

 

  • All the main constraining factors for the production of the manufacturing companies appear strengthened: 48% financial constraints (compared to 30% in September 2021), 47% limited demand (30% last semester) and 42% shortages of raw materials and / or equipment (compared to 32% last September).

 

3. SERVICES SURVEY

At a positive level but with a significant decline compared to September 2021, stands the Indicator of Business Expectations in the Services sector.

More specifically, the relevant “Business Expectations Indicator for the Services Sector” appears again at positive ground – after  September 2021 -  (+5 points from +23 last March the highest point since the beginning of the “TCCI Barometer” in March 2009) but with an obvious bend.

 

In particular, services at the Prefecture of Thessaloniki mention:

  • A negative and clearly worse situation appears – compared to September 2021, where it reached the highest level since the beginning of the TCCI Barometer – as far as the evaluation of their current business situation is concerned (from +10 in September 2021, to -14 today), when at the same time the level of demand over the last six months has dropped (while still in positive grounds, +14 from +31 last September 2021).
  • Positive but milder expectations for the evolution of demand for the next six months (+15 from +27 in the previous half).
  • Positive estimates are observed as far as the level of employment is concerned during the past 6 months, while a significant increase of price levels is expected for the near future.

 

4.RETAIL TRADE SURVEY

Significant deterioration is recorded in business climate of the Retail Businesses at the Prefecture of Thessaloniki, compared to that of September 2021, with the “Business Expectations Indicator for the Retail Trade sector” returning once again at a negative ground, after reaching its highest score in September 2021, since the establishment of the TCCI Barometer measurements.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Retail Trade sector” stands at -10 points (from +11 in September 2021).

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

  • After the positive evaluation of the sales level evolution that was observed in September 2021 for the first time in the history of the measurements of the TCCI Barometer, the assessment of the last six months is deeply negative, with the relevant indicator falling from +6 to -40. At the same time, the positive estimates of the previous year for the sales level in the next 6 months evaporate (from +15 points in September 2021 to 0 points today). In addition, estimates for the evolution of orders in the next six months also return at negative ground (from +4 last September to -15 today).

 

  • Moreover, they foresee a situation of “stagnation” as far as the employment in their sector is concerned, while the estimates for a significant increase in product prices in the immediate future are confirmed here as well.

 

5.CONSTRUCTION SURVEY

A deterioration of the Construction Sector Business Expectations Indicator is observed, after reaching its highest point since the beginning of the TCCI Barometer measurements (March 2021) and at a marginally neutral ground in September 2021.

Thus, the balance of positive – negative estimates of the “Business Expectations Indicator for the Construction Sector” stands at -17 points at the Prefecture of Thessaloniki (compared to -1 in September 2021).


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

  • The estimates for the development of the construction activity during the previous half have deteriorated, to -2 points today (from +19 points in September 2021).
  • A significant deterioration is observed (after the temporary improvement in September 2021) regarding the current levels of orders in the Construction sector.
  • There is a slight positive trend in the assessment of employment evolution in the sector for the next 6 months, and a general upward trend in the evolution of prices at a local level.

 

6.TCCI Barometer – AD HOC CONSUMER QUESTIONS

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".

  • War in Ukraine

The war in Ukraine causes deep concern among consumers in the Prefecture of Thessaloniki: approximately 3 out of 4 (77%) report that they worry “Much” (51%) or “Somewhat” (26%), compared to just 10% that report that they worry “A little” (4%) or that they don’t worry at all (6%). At the same time, 8 out of 10 consumers (81%) believe that the current geopolitical crisis in Ukraine has affected the level of prices for consumer goods and services “Much” (59%) or “Somewhat” (22%).

  • Electricity and heating bills

Electricity bills are characterized as unbearable by 25% of households in the Prefecture of Thessaloniki and they state that they are not able to pay them, while 65% consider them to be very high and they find it difficult to pay. Quite similar is the situation concerning heating bills, since 25% as well state that they are unbearable and they are unable to pay them, while 61% consider them to be very high and they find it difficult to pay. At the same time, only 9% and 13% of households, respectively, state that the bills are normal or low and they do not have difficulty paying them.

  • High prices

4 out of 10 (41%) consumers in the Prefecture of Thessaloniki consider that price increases in products and energy will be permanent, while a similar percentage of consumers believe that prices will return to pre-increase levels from 2023 onwards. Only 8% predict a return of prices to pre-increase levels sometime during 2022. In order to face the wave of price increases in products and energy, consumers in the Prefecture of Thessaloniki have taken a number of measures, such as limiting clothing and footwear spending (66%), restriction of other expenses such as entertainment and travel (63%), restriction of purchases of basic consumer goods such as e.g. food products (45%), restriction of private car use (38%), postponement of important purchases such as houses or cars (29%), reduction of cash reserves / bank deposits (22%), while 10% were forced to resort to borrowing. Only 1 in 5 households (18%) state that they have not taken any measures to address the increase in product and energy prices.

  • Means to facilitate purchases

56% of consumers say that offers in actual products (eg 2 at the price of 1 or free extra quantity of product, etc.) and price discounts would make it easier for them to buy consumer products today. This is followed by the offer of gift vouchers / coupons or reward points in commercial companies’ loyalty programs (26%) and the settlement of interest-free installments (19%). Only 3% state that they would be facilitated in making purchases of consumer products by paying in installments with interest.

 

7.TCCI Barometer – AD HOC ENTERPRISES QUESTIONS

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".

  • Energy cost

8 out of 10 companies (82%) state that their total energy operating costs have increased. Among them, the average increase reported is 75%, with 13% of companies reporting an increase of more than 100% and 40% reporting increases of more than 50%. 3 in 4 companies (74%) believe that the most effective measure to address the increased energy and fuel costs would be to reduce VAT and other consumer taxes, while 36% choose setting a ceiling on energy / fuel prices and 32% the highest business subsidy for the energy and / or fuel market. It is noted that 61% of the companies state that Greece cannot cope alone with the increased energy costs at a national level, compared to 16% who believe that this is possible.

  • Raw materials / Products shortages and price increases

In total, more than 4 out of 10 companies in the Prefecture of Thessaloniki find problems with shortages of raw materials or products in the market, either to a small extent (24%) or to a large extent (19%). 3 out of 4 companies (74%) detect an increase in prices of raw materials and products in general and only 13% have not seen any increase in costs. Among those who have detected increases, the average increase reported - according to their responses - is 52%, while 29% report increases of more than 50% and 5% above 100%. Overall, 65% of businesses report that they have incorporated or are incorporating increases in raw material and energy costs into the final selling cost of their products or services, either to a small extent (29%), to a large extent (17%), or completely (19%). Only 26% of the companies did not and / or do not incorporate these increases into the final selling cost of their products and services.

  • Impact of the Ukraine war

More than half of the companies (55%) say that the Russia - Ukraine war has affected their company by increasing the cost of raw materials / products and energy, 42% say that the demand for the company's products and services has decreased, 22% report shortages of raw materials / products in the market and 8% state that the company's exports have been affected. In contrast, 22% of the businesses report that their company has not been affected by the war in Ukraine.

  • Continuation of the negative effects of the pandemic on businesses

About 1 in 3 companies in the Prefecture of Thessaloniki report that the COVID-19 pandemic still affects them negatively "Very much" (9%) or "Somewhat" (23%). For the majority of businesses (68%), the pandemic now has little (35%) or no negative impact on their operation (33%). In fact, 33% of the companies report that they have already returned to normal operating levels (before the COVID-19 pandemic), 24% expect a return to normal operating levels sometime by the end of 2022, while 14% report that at some point during 2023 and 8% from 2024 onwards. Only 4% of businesses in the prefecture of Thessaloniki now report that their company will never return to pre-pandemic COVID-19 levels.


 



 



 

 

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