A recent survey of business confidence by KPMG International has revealed some differences in the priorities of business leaders in various countries in Europe. The KPMG ‘European Business Leaders’ Agenda’ surveyed more than 1,000 senior business leaders from 10 countries in Europe, including Romania and across 12 industry sectors.

Key findings from the survey include:
• Overall, 46 percent of business leaders said developing strategies for growth topped their priorities
• Growth is the top priority for businesses in Belgium (61 percent), the Netherlands (56 percent), the UK (56 percent) and Greece (50 percent)
• More smaller businesses (53 percent) than larger businesses (40 percent) say developing strategies for growth is their top priority
• Growth was the top priority for 10 of the 12 sectors surveyed – led by electronics, software and services (61 percent), food, beverages and consumer products (58 percent), automotive (53 percent) and energy (52 percent)
In Romania, 62% of those surveyed considered that `taking a strategic and coordinated approach to risk´ is their top priority. A significant number of the Romanian business leaders surveyed considered that it is important to “embed a risk strategy in the business.” Unsurprisingly, a high proportion saw “exploiting the potential of emerging markets” as important. 20% of Romanian business leaders surveyed considered “developing a vision for the future” to be a top priority,.
As Daniela Nemoianu, Executive Partner at KPMG in Romania points out; ”the emphasis which Romanian business leaders place on risk is a reflection of the difficult times we have been through. This is the first major recession which Romania has suffered in the post 1989 period, and many businesses have been hard hit. They have had to learn to assess risks which exist to their business, and incorporate strategies for dealing with them into their forward planning. But this has been a useful exercise, as those companies which have survived the recession are now in a stronger position to succeed under both favorable and less favorable economic conditions.”
In the analysis by industries, the Automotive industry is facing enormous pressure from various angles. The quest for alternative technologies is still far from bringing concrete solutions, and it is not surprising that `preparing businesses for future business challenges´ (62%) is number one priority for automotive companies and `exploiting the potential in emerging markets´ (31,4%) is also a crucial topic for them, although `sustainable improvements in cost efficiency´ is likewise of major importance. The Construction and Real Estate sectors are facing a very challenging business environment and will be for some years to come. In consequence, the order of importance of the selected topics does not change significantly in this sector. However ‘improving cash and working capital management’ (54.5%), received a much higher rating than in the overall results (nineteen percentage points higher), which indicates that one in five executives consider this priority of major importance.
“Real Estate has been particularly hard hit in Romania. There was a speculative boom in the 2-3 years before the recession, and then prices fell dramatically, in some cases by up to 50%. However, the situation looks more stable now, and I’m confident that there is potential for sustainable growth.”
In Healthcare, due to the increased cost pressure within the social security systems and governmental budgetary restrictions, the short-term need for improvements in cost efficiency are evident. As Daniela Nemoianu points out: “In Romania the pharmaceuticals sector has considerable potential for growth. There are currently some challenges resulting from the increased use of generic drugs as the government tries to stem rising costs in the public healthcare sector. Nevertheless in the long term as living standards rise, we can expect to see more investment in both public and private sector healthcare and the pharmaceuticals sector has an important role to play in improving the quality of healthcare for Romania’s citizens.”
In Telecoms and Media, which have been through a huge transformation in recent years, the priority that has received the highest score in the survey overall is “preparing the organisation for future business challenges.” This comes 27 points or more ahead of the priorities which come in second, third and fourth place. As Aurelia Costache, Partner, Head of Performance & Technology services, continues: “The Romanian telecoms sector has also seen huge change in recent years, not only in terms of technological development, but also because of increased competition. Although Romanian telecoms providers face challenges, I still expect telecoms to be a growth area in years to come.”
In the retail sector, 46.8% of those surveyed considered “Anticipating changing customer and stakeholder behavior ” to be a top priority, reflecting the particular volatilities of this sector which can be very vulnerable to changes in consumer behavior. “After several years of strong growth, the Romanian retail sector has suffered in the recession, as unemployment has risen, wages in the public sector have been cut, and confidence has fallen significantly. So many Romanians have reined in their spending and concentrated more on saving. However, once the recovery begins, consumer confidence can be expected to return, and this should lead to renewed growth in the retail sector.”
Daniela Nemoianu concludes: “The survey shows that in general, businesses in Europe are making plans for growth, while remaining aware that many challenges still lie ahead. In Romania, the strong emphasis on incorporating risk management into business planning reflects some of the lessons which Romanian companies have learned over the past two years. I’m looking forward to reading further editions of the survey, which I hope will reflect growing optimism about the business climate, both in Romania and in the rest of Europe.”
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