Swedbank: 87% of Industrial Companies Expect Turnover to Increase
OREANDA-NEWS. June 27, 2012. Swedbank surveyed the attitudes of Estonian industrial companies and found that 87% of companies operating in the area of manufacturing industry forecast an increase in turnover; every third company plans to invest; and half the companies intend to increase the share of export, reported the press-centre of Swedbank.
“We surveyed ca. two hundred industrial companies whose turnover exceeds 4 million euros and found that their expectations for the future are surprisingly positive,” said Rober Kitt, Managing Director of Swedbank’s Corporate Banking. “The prevailing expectations of an increase in turnover are very pleasing, but the result also showed that some companies don’t have sufficient production resources for increasing their turnover. Investments and industrial production volumes have always followed the same trends. The results also indicated that medium-sized companies plan to be more aggressive when investing for the purpose of increasing their production capacity.”
Kitt added that the strong presence of the manufacturing industry on export markets was the main reason the Estonian economy recovered so quickly from the recession. “The order books of Estonian industrial companies are full today even if negative signs can be seen in the eurozone and in the global economy,” he explained. “The flexibility of Estonian industry and its ability to produce in small quantities, which allows it to quickly adapt to changing external conditions, are the key to success.”
“However, if orders suddenly disappeared due to the goings-on in Western Europe, then it would happen fast,” Kitt admitted. “One minute, there are a lot of orders, but this may be followed by a sudden decline. An exporting company probably has a sense of what’s going to happen in the next three months, no more.”
The financing portfolios of companies has remained stable for the last six months and the decrease has stopped. “The increase in loan portfolios in the manufacturing industry during the economic boom was modest compared to other sectors and the decrease in portfolios stabilised sooner in this area,” added Kitt.
Swedbank surveyed the opinions of ca. 200 larger Estonian industrial companies in regard to their turnover, production quantities and investment plans. Heavy industry, the building materials industry, food industry, timber industry and other manufacturing industry were separately covered in the survey.