On the way: 180000 businesses will close and 240000 employees will get fired

This is the reality that characterizes the backbone of our national economy, which is none other than the fact that small and medium businesses are beyond hope.

Research clearly shows that companies with a staff of up to 49 people, who make up 99.6% of Greek businesses are facing serious problems of survival.

According to a survey conducted by IME – GSEVEE, approximately 180,000 businesses say they are at risk of closing down in the next twelve months! Bearing in mind the sustainability factor, it is estimated that 61,200 is the net reduction in businesses in the next twelve months - including about 12,000 in the next quarter.

GSEVEE refers to risk of loss of 240,000 jobs (employers, self-employed) in the next twelve months, while it is also worth noting that every recruitment in the private sector represents seven layoffs.

Additionally, there is an estimated loss of 106000 jobs by July 2012 and a further deterioration of labor relations. It is also estimated that at least 65,000 jobs were lost in the second half of 2011.

The survey recorded an increase in business that reduced working hours and days (37.4%), while 28.6% cut staff salaries. It is forecast that for the first half of 2012, 43% will reduce wages and hours of work and that only 22% felt that their money is safe in banks, 29.2 % abroad, with 37.1% in other deposits.

46.5% regards operating costs as a major obstacle, 36.5% thinks the same of social security contributions, while only 5% regards wages as an obstacle. 

More than 8 in 10 businesses prefer to reduce social security contributions and only 2.5% would reduce the minimum wage, while one in three companies have arrears and liabilities (IKA, OAEE, Public Utilities, Public Funds, Suppliers)

The percentage of firms in OAEE must exceed 38%.

In conclusion, the majority of small businesses (55%) believes that it we will not be able to avoid default, and this fact alone has direct adverse effects on the economic cycle...

The research presented is the first in 2012 and the fifth in a series conducted by the GSEVEE Institute of Small Businesses in collaboration with the MARC AE company twice a year since May 2009. It was made with  a nationwide sample of 1,200 SMBs (0-49 employees), between the 10th  and 18th of January 2012 and its main aim was to capture the economic climate of SMBs in manufacturing, trade and services, which constitute 99.6% of companies in Greece.

The findings of this survey can be compared with those of surveys in July 2011, January 2011, July 2010 and February 2010. These surveys began in May 2009 and were repeated every six months; they are now the only tool, nationwide for recording the status and progress of most of the real economy in Greece.

As with previous surveys so far, it is a clear attempt to record trends in the economic climate and the monitoring of key indicators for small businesses during the second half of 2011, while it also predicts the first half of 2012. The survey data shows that the economic sentiment indicators are at the worst point since the surveys began.