Amid the abyss of the crisis triggered by the novel coronavirus (Covid 19) pandemic, business seemed lost. The normal cycle was disrupted, supply chains were faltering, consumption dwindled to trickle, money was still there but everyone knew that it would also be gone if the economy kept on sinking.
It was during this woeful time that KQ decided to ask managers of the biggest companies in Bulgaria how their local business was faring. One of the biggest concerns was that the simultaneous abrupt halt of both services and manufacturing might trigger a wave of closures of local branches in smaller economies.
It turned out rather differently
The short and express survey we did is by no means representative. The questions were sent to a little more than 40 people running big enterprises in Bulgaria. Half of them responded so the survey is at least some sort of bellwether for what is going on and how foreign business is doing in Bulgaria.
The answers are rather unanimous in the first part - there has been no closure or even temporary stoppage of work in the months of Covid-19. None of the people surveyed says they've halted the work process.
As many as 70% of them said that neither salaries nor workforce have been cut, which is remarkable. Three managers said they've cut salaries, one has reduced workforce, and two have cut both salaries and staff.
For 90% of the surveyed, the pandemic has reduced their business by 20% or less, and for 40% the crisis has chopped less than 10% of their business. This is a rather good situation to be in before autumn comes. Although most of the local units obviously didn't take a big hit, a large group of managers are deeply worried about the economy, not politics. As many as 65% are worried that a deep recession is looming, or consumer demand will drop for a longer period. Six in 10 are worried about a crisis in the Eurozone. However, the survey was conducted before the announcement that the EU is going to underwrite a massive amount of debt in order to deal with the situation, so that might help.
Politics don't seem to matter that much to the managers of the local units of foreign companies - just 30% say they are worried about a change in leadership in Bulgaria. Yet, there is obvious discontent with the way the government has tackled the economic consequences of the pandemic. Not a single respondent says they are satisfied with the government's measures for economic support of businesses, 30% say the initiatives were a good first step but not enough, another 30% think that even those measures haven't been implemented properly, whereas 35% are flat negative about them.
Only 2 of those surveyed have used the job retention programme popularly known as the '60/40 measure', and just two enterprises have opted for freezing the repayment of loans.
Another other interesting find is that almost no one (15%) is worried about supply chain management. This probably shows that the overhyped near-shoring where supply chains are moved closer to home is still some way off.