According to results of the Chief Financial Officers survey conducted by SEB Bank in September, 25% large companies in Latvia, 33% – in Estonia and 43% in Lithuania plan to increase the number of their employees in the next six months.
Furthermore, 61% large companies in Lithuania, 53% – in Estonia and 48% – in Latvia also have plans to increase their costs in 2017.
Ints Krasts, member of the board in SEB Bank, says: «Lithuanian big companies have clear ambitions to boost their costs and staff. This mood is linked to the overall optimism which is currently present in the Lithuanian economy. It is reflected also in the amounts of lending: in terms of lending to companies and private individuals this year Lithuania has outpaced both Latvia and Estonia by a large margin. Also Estonian corporations are stepping up their ambitions while the plans of Latvian companies in terms of costs and staff remain fairly down to earth.
During previous two years we have been observing as Lithuanian and Estonian corporations are focusing on investing in development of their businesses, while Latvian big companies were using their cash surplus to pay their debt and dividends to shareholders. In other words, they were taking the money out of their businesses. Therefore I am glad to see that this year the investment ambitions of Latvian companies are no longer lagging behind its two Baltic neighbours. In all three states around 60% of large companies intend to spend their cash surplus in developing their businesses.»
At the same time, 16% of CEOs in Latvia admitted having plans to reduce the number of their employees.23% of them also plan to reduce their costs in the near future. 9% large companies in Lithuania and 7% – in Estonia plan to reduce the number of employees. As for upcoming reduction of costs, this measure is present in the plans of 20% large companies in Estonia and 18% – in Lithuania.
A little over half of companies in Baltic States view perspectives for business development optimistically: 52% of CEOs in Latvia, 53% – in Estonia and 50% in Lithuania expect turnover in their respective companies to increase in the next 12 months.
In general, the majority of large companies in Baltic States describe their financial situation as either good or very good: 67% of CEOs interviewed in Latvia agreed with this statement (68% in Estonia and 74% in Lithuania).
Representatives of the largest companies in Lithuania general view the business environment more optimistically than others – 53% of interviewed CEOs view it as such. The same opinion was voiced by 45% of CEOs in Estonia and 43% – in Latvia. The opposite opinion was voiced often enough as well: 16% of CEOs in Latvia and Estonia, as well as 11% CEOs in Lithuania described their business environment as poor.
«The mood of large companies is influenced in a negative way by the lack of access to EU funds, which is equally relevant for all three Baltic countries. More likely than not, this situation will change in next year and flows of EU financing will become available in Baltics, enabling companies to step up their investment plans. Moreover, interest rates are currently at their historically lowest positions which makes this a very good time to back your investment plans with long term financing,» – Krasts noted.