2017-02-02
Survey: Withdrawal of UK from EU to have no negative impact on most of Lithuania’s enterprises
Four out of five surveyed enterprises believe that the withdrawal of the United Kingdom from the EU will not have a negative impact on their operating results. The latest Bank of Lithuania Review of the Survey of Enterprises also shows that nearly half of enterprises increased the wages paid to employees, while a third intend to do so in the future as well. A major share of undertakings claim that a shortage of staff contributes to the rise in wages.
‘Large enterprises and undertakings engaged in trade most often indicated that the withdrawal of the United Kingdom from the EU will have a negative impact on their financial standing. In addition, this time our survey asked enterprises what impact they would feel if there was a reduction in the provision of EU funds. On average, two out of three stated that this would not impact the enterprise’s financial standing, while every fourth believed that they would nevertheless be negatively affected. The potential negative impact of the decrease in EU funding was mostly emphasised by large enterprises and enterprises engaged in construction activities,’ said Simonas Krėpšta, Director of the Financial Stability Department of the Bank of Lithuania.
Enterprises in the construction sector are most likely to increase wages in the future – such plans were expressed by almost half of the surveyed enterprises in this sector. Wages in the near future should increase also for nearly half of the industrial sector’s enterprises and for around a third of employees in undertakings engaged in trading activities.
Although half of the surveyed undertakings have an optimistic outlook towards the future prospects of the business environment, compared to the survey conducted in early 2016, the number of undertakings planning business expansion has decreased. This year, every fifth enterprise has plans for business expansion, although nearly 40 per cent of surveyed undertakings had indicated that they planned to do so previously. Undertakings operating in the services sector plan to expand the most – one fourth of surveyed enterprises in this sector.
In assessing crediting, enterprises believe that borrowing opportunities for businesses in the second half of 2016 were improving, while the terms and conditions for loans from banks were easing. A third of enterprises believed that lending to enterprises is entirely or partially limited – 15 p.p. less than during the earlier survey. There was an increase in the number of enterprises, whose requests for provision of a new loan or changing of the terms and conditions of a current loan was fully satisfied by a credit institution. Approximately every tenth enterprise’s request was rejected – similar to half a year ago. The significance of the general economic environment as the main reason for rejection of requests dropped significantly. Nevertheless, around half of surveyed enterprises claimed that they have sufficient internal resources, thus there is no need to borrow.