Survey of Greek SMEs (Second half of 2012)

In the last months of 2012, NBG's business confidence index for SMEs, although remaining in negative territory, posted an improvement (mainly in the sectors of export-oriented manufacturing and tourism). In particular, while the expectations component has remained flat over time, the assessment of current demand component has improved.

This survey confirms that at the end of 2012 layoffs and store closures intensified - layoffs occurred at 51% of SMEs (compared with 43% at the beginning of the year) and store closures affected 17% of SMEs (compared with 13% at the beginning of the year). Likewise, at year end 2012 lack of liquidity remains a serious problem for 40% of SMEs (mainly under the pressure from the quicker payment of suppliers and the decline in use of post-dated cheques).

With a view to exploring growth prospects, this survey focuses primarily on the most dynamic part of the small and medium business sector, i.e. firms with international activity.

• In Greece, SMEs contribute to total exports by 35% vs. 24% for European SMEs. Specifically, 1/3 of Greek SMEs are export-oriented, while 1/4 of them generate most of their turnover abroad.
• Medium-sized companies have an obvious comparative advantage with respect to the ability to promote their sales abroad, as 42% of medium-sized enterprises export compared with just 17% of small enterprises. As a result medium-sized firms account for a significant share of exports (21% vs. 12% for their European counterparts).
• Several SMEs start out their international activity in the less competitive markets of SE Europe, before managing to break into the developed Western European markets.
• A significant part of SMEs (circa 1/3) are engaged in international activity not on their own initiative, but after being approached by foreign customers. This indicates that there is a significant potential for Greek products to further penetrate overseas markets (mainly in Western Europe), in the event that Greek SMEs decide to embrace a more active outward-looking strategy.