Small businesses have learned to live with the downturn in the economy

Small businesses have learned to live with the downturn in the economy


Small businesses have learned to live in a new environment and waiting for a market recovery, said in a June study of Alfa-Bank “the Pulse of small business” (conducted semiannually). Although negative assessments still prevail over the positive, the bottom of the crisis from the point of view of entrepreneurs was passed in the end of 2015, revealed today Alfa-Bank sentiment index of small business.

A similar picture shows the index of business sentiment of small and medium enterprises, we expect “Support of Russia”. According to them (.pdf), in the second quarter of this year, small business sentiment has improved, although the segment was not yet on a trajectory of growth, but only slowed the pace of decline in business activity.

Alfa-Bank for the study interviewed 2554 clients — legal entities and individual entrepreneurs with revenues of up to 350 million rubles per year. The study calculated the index for small business, based on the perception of entrepreneurs of the current economic situation, assess the current state of Affairs in the company and projections for the next six months.

Sentiment index of small business, according to calculations by Alfa-Bank increased in comparison with November 2015 to 14 points, with increased -38 to -24, and almost returned to the level of a year ago (-25). The negative value of the index suggests that among entrepreneurs is dominated by negative sentiments, but in comparison with autumn of last year the balance has improved. Your current position entrepreneurs appreciate the well: there are more companies reported a net profit and number of clients and plans to increase the number of employees, says Alfa-Bank. This is consistent with the overall improvement of economic situation in the country on the low base effect: consumer moods of Russians has improved, has ceased to fall industry, salaries are rising again, and the ruble is growing.

Entrepreneurs are becoming more

Despite the difficult economic conditions for small businesses, the number of people willing to open a small business in Russia continues to grow. According to statistics FNS, in 2015 the country has registered 653,4 thousand individual entrepreneurs, and ceased operations 564,5 thousand individual entrepreneurs (including 544 thousand in its sole discretion), that is an increase of approximately 89 thousand In 2016, this trend is continuing: in the first half checked in reached 360.3 thousand SP, closed 298,7 thousand Thus, compared with the beginning of the year in Russia has increased about 62 thousand active individual entrepreneurs.

“In the fourth quarter of last year was the strongest drop in economic activity, that is, compared with the fourth quarter of last year, all of the current indicators look better,” says the President of “OPORA Russia” (organization represents the interests of small business) Alexander Kalinin.

Assessment of the small business of the current economic situation for the country as a whole, and by industry became more positive, but pessimists still far more than the optimists. 81% of small businesses believes that the economic situation in the country hampers the development of business, and only 14% said that helps. Over the past six months, companies dropped profit (reported by 54% of respondents) and revenue (50%), and increased these figures only 15 and 20% of enterprises, respectively.

The study documented more companies planning increase in turnover and expansion into new markets: their share in six months increased from 42 to 46% of respondents said the head of the mass business of Alfa-Bank Denis Osin. “However the small business continues to focus on working with cost and profit,” he says.

In terms of sectoral distribution, the most optimistic mood among the IT companies and also in manufacturing and business services, while the lowest index of sentiment among construction companies and shippers. During the economic downturn primarily affects the investment industry such as construction, machine tools, car sales, says Alexander Kalinin of “legs”. “Indeed, the most difficult situation we had under construction last year was laid 20% fewer new homes. But now there is also there have been sales,” he says. The negative sentiment in the freight Kalinin is also associated with a reduction in investment activity which led to a drop in orders for transportation.

Higher risk customers

Authorities are trying to stimulate lending to small and medium businesses, but it is not very good. So, banks that are recipients of Federal assistance under the program of recapitalization through Federal loan bonds (30 banks) are required to increase monthly by 1% of the total loan portfolio for priority areas, which the government attributed to small businesses. In the aggregate banks comply with this requirement follows from the regular monitoring of the Bank of Russia, but not at the expense of loans to small business in this priority segment average monthly growth of lending as at April 1, amounted to only 0.3%. For comparison, these same banks are increasing mortgage loans and investments in mortgage bonds by 2% a month, loans to agriculture — 1.6%, regions — 1.5%. The reason for the caution of banks in the segment of small and medium business — the risks are too great, given the 15 percent the share of delay in this segment, explains in its July monitoring of the Central Bank (a copy of the document is in).

The policy of import substitution yields first results: almost a third of customers switched to domestic substitutes, or they themselves began to produce the necessary components, according to the survey. One third of entrepreneurs (32%) noticed the negative impact of Western sanctions on their business, half of respondents (54%) believes that the sanctions on them are not affected, and 6% of businessmen noted the positive effect of sanctions. From sanctions suffered by retailers, the construction sector and the transportation sector. Negative impact, according to respondents, resulted in a decrease in demand (34%) and rising costs (23%).

The main problem for business half of the respondents in the study by Alfa-Bank believes the decline in demand, over a third indicate the high taxes. 40% of employers complain about the lack of financial resources for development. And according to the index “Support of Russia”, the loans are taking a very small number of entrepreneurs, with only 8% of respondents reported that received a loan in the second quarter of 2016.