EIB survey: The shock in the energy sector strongly affected Romanian companies

The shock in the energy sector has strongly affected companies in our country, about a third reporting a large increase in energy expenses, compared to companies in the United States, according to a survey by the European Investment Bank (EIB) that was presented yesterday within a conference hosted by the BNR.

On the other hand, companies in our country as a whole have shown resistance beyond expectations in the face of the slowdown in economic growth and are prioritizing the expansion of production capacities, according to the EIB.

According to the survey, which was conducted in April-July last year, on average, companies in our country were relatively optimistic about their investment intentions for 2023, despite the slowdown in economic growth and the tightening of monetary policy. The EIB's investment survey covered more than 12,000 companies in the European Union and 800 companies in the United States.

Mugur Isărescu, the governor of the BNR, said: "We are happy to see that, according to the findings of the EIB, the general picture of investments in Romania has improved compared to the previous edition. For example, expectations related to the economic climate have increased substantially in Romania. Also, according to the survey, Romanian companies show a higher level of optimism than the European Union average when they are asked about the availability of internal and external financing".

According to the survey, Romanian enterprises (72%) were particularly affected by the energy shock, similar to EU enterprises (68%). Romanian firms were as likely as those in the EU as a whole (94% versus 95%) to have responded to the energy shock by adopting one or more relevant strategies. The strategies most frequently cited by the companies in our country were the search for savings/energy efficiency (83%), the renegotiation of the energy contract (65%) or the modification of the energy mix (64%). Also, a third of Romanian companies (35%) mention stopping or reducing the production of certain goods as a strategy or priority, above the EU average (24%).

In terms of barriers to international trade, disruptions in the global supply chain (61%) and compliance with new regulations/standards/certifications (58%) are the main trade-related obstacles faced by Romanian firms. In response to these difficulties, six out of ten Romanian firms (62%) have changed or intend to change their sourcing strategy, a higher proportion than for firms in the EU as a whole (49%). Romanian companies were much more inclined than EU companies to invest in digital inventories and monitoring operations (46% vs. 20%). Romanian importers were more likely than those from the entire EU to reduce their share of imported goods and services (20% compared to 10% in the EU) and to diversify their list of countries or to increase the number of countries from which they imported (42% compared to 24%), according to the survey.

Vulnerability to further shocks remains. Romanian firms are more likely to suffer from a tightening of financing conditions, while uncertainty about the future (86%), energy costs (81%) and the availability of qualified staff (79%) remain the most frequently mentioned obstacles in the long term, according to the EIB.

"This time, supportive policies have managed to protect economies from the worst and also support the transformation of the economy: net-zero transition, digitization and the resilience of global value chains. However, financing the transition will be challenging in the context of high interest rates and fiscal consolidation measures. All available sources must therefore be mobilized, including EU funds from the Recovery and Resilience Facility and the Operational Program 2021-2027, to ensure the transformation for competitiveness, with a fair and sustainable transition," said EIB Chief Economist Debora Revoltella.