Small business prepared for the new challenges in the economy

Poor prospects

Expectations of a small Russian businesses about the economy and the business climate deteriorated, the study said Alfa-Bank “the Pulse of small business”. The index of business expectations, which analysts expect the Bank every six months based on 1,4 thousand online interviews with legal entities and individual entrepreneurs in November was minus 35 points (this index can vary from minus 100 to 100 points). This is worse than six months earlier, when the indicator was at minus 28 points. And if then the index showed a positive trend (increased by 19 points compared with minus 47 points in the fall of 2015), now again there is a negative trend. The worst prospects of the Russian economy assess a company engaged in the manufacturing sector (index—minus 40), as well as in the IT and construction (minus 37). At the same time to life in a new environment, a small business adapted, the study authors write (this is what they said in June).

The authorities pay much attention to improve the business climate in the country, said on Monday at a meeting with businessmen, President Vladimir Putin. The economic situation is stabilized, “despite adverse developments in the global markets and in the political sphere,” he said. According to IHS, Markit, the purchasing managers ‘ index (PMI) in the manufacturing sector in November reached a maximum value for the 68 months (53.6 points), PMI services grew to 54.7 points in November, which is close to the July high of over three and a half years (55 points).

The business is waiting for commit “stable rules of the game” and positive decisions from the authorities, “is aimed at changing conditions for all”, but they are not, says the Vice-President “Business Russia” Anastasiya Alekhnovich. So, discussed the creation of a special status for self-employed taxpayers, however, this did not happen, she leads by example. “Partial decision” was made and the supervising vacation, enter that in 2016 requested the President Vladimir Putin, adds Alekhnovich. The decision related to scheduled inspections, but in fact, as he wrote, citing data from the Prosecutor General’s office, 66% of audits are outside of the plan. In addition, the measure only concerns small business and the average “vacation” does not apply, emphasizes the multiplex.

On business expectations affected the situation of cadastral valuation of real estate, the expert says: in July, a moratorium was imposed on her an extraordinary revision for three years, but in December, the regions received the right to enter or cancel this restriction. Concerned about business and “continued discussion” changes in insurance premiums, tax rates, possible cancellation thresholds for contributions to extra-budgetary funds. On Monday, Finance Minister Anton Siluanov once again announced plans to consider a question with the insurance premiums — it is unclear how this will change the load on the business, adds the interviewee . All this combined with severe macroeconomic situation, the lack of clear business long-term economic strategy, the unavailability of credit, the introduction of non-tax fees and demolition of non-stationary retail outlets across the country, she says.

Russian officials and experts have repeatedly stated about passing the “bottom” in the economy, and in the third quarter GDP for the first time in 2014 showed a positive trend compared to the previous quarter, which technically means the end of the recession. But much of this was due to the increase in public investment in major projects, in particular construction and defence, said the first Vice-President “Support of Russia” Vladislav Korochkin. In addition, state support and government contracts often benefit the company close to the government, he said, a “small business goes not so much”. For small companies reflected the strengthening of the work of the regulatory bodies, he adds.

“Survival” as a criterion of success

Evaluation of small companies current situation in November of this year remained virtually unchanged, amounting to minus 67 from minus 68 half a year earlier, according to Alfa Bank. Hopes on the growth of purchasing power, which they expressed in the previous survey did not materialise, analysts stress: only 2% of respondents noted the improvement of this indicator, whereas I was counting on it five times more companies.

In this case the position estimate is much better than the state of the economy as a whole. Thus, the index of the current situation of the company was minus 15 points, up one point compared with the estimate from six months ago. While the index of expectations for the next six months remained in “positive” end of the scale, although decreased from 17 to nine points. “Against the background of the protracted stagnation of the economy “survival” in the current environment becomes a more important criterion of success. The result is a growing number of entrepreneurs who consider their business successful (3%),” write the experts of alpha Bank. “If companies do not feel positive, then they are immediately closed, without a positive attitude it is impossible to work in the market and to overcome difficulties,” — said the multiplex.

Alpha Bank also asked the respondents about the impact of sanctions on their business. Only 5% of companies have seen restrictions in a positive way, about the negative impact of the stated 38% (for 52% of this influence is not, and 5% found it difficult to answer). Thus, the business began to perceive sanctions worse than six months ago (.pdf). Then about their advantages said 6% of respondents, and about the disadvantages of 32%.

Sanctions have an impact on the activities of 48% of the companies follows from a November poll by the Russian Union of Industrialists and entrepreneurs, and it comes as Western sanctions and a retaliatory food embargo. However, the study mainly involved representatives of big business. “We often repeat like a mantra that the so-called notorious sanctions on us is not really affected. Affect. And above all, the threat I see to limit the transfer of technologies”, — said in October Putin. The sanctions “are harmful to all,” said last week Prime Minister Dmitry Medvedev.