Survey: High inflation has negatively affected over 80% of Bulgarian businesses, the war in Ukraine - over 56%

Over 500 Bulgarian small and medium-sized companies completed the survey of the Executive Agency for the Promotion of Small and Medium-sized Enterprises (EAPSME) and gave feedback on their development in 2022 in the conditions of a number of unfavorable factors such as high inflation, the political situation in the country, the war in Ukraine, the post-pandemic setting and others. This was announced today by EAPSME.

From the analysis of the data carried out and summarized by the Agency, it is clear that last year the strongest negative impact was high inflation - nearly 83% of SMEs note the rise in prices as a problem, and the second most negative impact respondents put the political situation in the country - it had an adverse effect on 63.5% of the companies. In third place in terms of negative impact are problems in supply chains (57.6% of companies).

The national survey also shows that the assessments of the owners of small and medium-sized enterprises about the development of their business in terms of the offered portfolio of products and services, the sales made and their position in the market in the country remain unchanged compared to the previous year. Regarding the position of SMEs in foreign markets, 58.6% of respondents indicated that their market share remained unchanged. However, only 25.7% of SMEs recorded an increase in profit during the year.

The research indicates that the percentage of SMEs that have introduced some kind of innovation is over 70, which significantly exceeds expectations and is a reason for optimism for their development. The share of realized product innovations is the highest (40.6%). This is closely related to the high quality of products and services indicated by the respondents as the biggest competitive advantage of their enterprises.

The most serious problems faced by enterprises according to their owners are the lack of qualified labor, high prices of energy carriers and high prices of materials and raw materials. The lack of qualified employees is indicated as the main problem for the development of SMEs by nearly 55% of entrepreneurs. This problem has the potential to intensify, given the growing demand for qualified personnel from all economic spheres, as well as the growing and emerging new requirements and skills for them.

Enterprises need financing mainly in the field of technological modernization and export activity.

Despite the dynamic situation, 61.6% of small and medium-sized enterprises believe that their business is moving in a positive direction and maintain their optimistic attitudes about its favorable development this year.

The survey was conducted in January 2023, with over 500 companies answering 22 questions by group. The full analysis, graphs, detailed data, assessment of the business environment in Bulgaria and others is published on the agency's website.

The data from the present survey will also be included in the Annual Analysis of the State of Small and Medium Enterprises, which is traditionally prepared by EAPSME and which will be presented soon by the organization.