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NEWS - 17. February 2017 13:55

SEB survey: Optimism of Baltic SMEs has decreased; Lithuania has the best outlook

Small and medium-sized enterprises (SMEs) of Estonia, Latvia and Lithuania are less optimistic than before, when it comes to assessing the outlook for this financial year, indicates SEB annual survey Baltic Business Outlook. The highest confidence among countries is in Lithuania.

According to the survey organised among more than 4500 Estonian, Latvian and Lithuanian enterprises, the proportion of optimists, that is, enterprises expecting at least 15 per cent growth in turnover, has decreased. Among Lithuanian SMEs with the most positive view on the financial year, the per cent of optimists was 15 and that of moderate optimists at 66 per cent. Unlike Estonia and Lithuania, where the proportion of pessimists was below 50 per cent, the share of such enterprises in Latvia was notably higher (61 per cent).

“If two years ago the most optimistic SMEs were found in Estonia, then the improved sense of security over the last few years has yielded the most optimistic result in Lithuania. The outlook in Estonia is still quite good, as 69 per cent of SMEs are expecting growth in turnover this year. The most optimistic enterprises in Estonia are located in the agricultural sector; among counties, in Harju County; and in terms of turnover, among enterprises where the annual turnover is between EUR 65,000 and 200,000. When looking at the size of turnover of optimists, it is clear that these enterprises have the potential to reach a higher level with the help of development and innovation,” said Ainar Leppänen, Member of the Management Board member and Head of Retail Banking and Technology area at SEB Pank.

Domestic sales dominate

According to the Baltic Business Outlook, Baltic SMEs target their products and services more towards the domestic market – 79 per cent in Latvia, 76 per cent in Estonia and 71 per cent in Lithuania. Since lower sales growth is expected for 2017, the enterprises are not rushing to hire new employees – this indicator has dropped in all three countries, although 27 per cent of Lithuanian entrepreneurs still intend to employ more people. At the same time, 80 per cent of Estonian enterprises do not plan on making any changes among their staff, and 19 per cent of Latvian enterprises instead intend to reduce their number of employees.

Foreign labour is found only by 4–7 per cent of Baltic SMEs and 6–8 per cent are interested in hiring them in the future. A clear majority indicate that they do not have foreign labour in their enterprise and have no intention of employing any.
Eighteen per cent of Lithuanian SMEs and 13 per cent of Estonian and Latvian SMEs plan to invest more than EUR 30,000, which is pretty close to last year’s level. Less than one half of enterprises have no investment plans for 2017: in Estonia 20 per cent, in Latvia 22 per cent, and in Lithuania 40 per cent of enterprises.

There is still room for development in innovation

When talking about innovation, enterprises still prefer product and service related improvements – 35 per cent of Estonian, 32 per cent of Lithuanian and 21 per cent of Latvian SMEs confirmed that in 2017 they intend to focus on it, although interest in all countries towards innovation in this area has decreased. Business model innovation has slightly increased in Lithuania (from 7per cent to 11 per cent) and innovation, developing employees, in Latvia (from 12 per cent to 16 per cent).

“Innovation among SMEs should definitely be pampered and SEB will be making its contribution there. In April, we will be opening an innovation centre at the bank’s head office in Tallinn, where businesses will be able to test new growth models that will help them grow faster than their competitors. The aim is to bring globally proven methods used by start-ups to traditional companies, in order to implement innovation at a rate that is several times faster than what is being done today,” Leppänen noted.

For the fifth consecutive year the SEB Grupp conducted a survey in the Baltic countries, mapping the expectations of small and medium-sized enterprises (SMEs) for the 2017 financial year. The new edition of the Baltic Business Outlook presents a summary of the project and profiles the views of 4542 Baltic SMEs that completed the survey.


For more information:

Evelin Allas
Communications Manager
Marketing and Communications Division

Phone +372 665 5649
Mobile +372 511 1718
Address Tornimäe 2, 15010 Tallinn

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