This year, 19% of engineering and 13% of transport companies plan to increase investments in replacement and development

Press release

6/18/2012
8:00 AM

Significant differences exist between representatives of various sectors of the economy as regards their expectations of economic developments in the coming months, according to a survey conducted by Societe Generale Equipment Finance amongst major domestic companies. Fifty-four percent of the respondent companies do not expect any appreciable changes for the better, while one third of the respondents expect the conditions to deteriorate.

The purpose of the survey was to gauge companies’ willingness to invest in further development and trigger growth. Societe Generale Equipment Finance has polled more than 400 engineering, transport, construction and agricultural companies.

Builders and farmers take the most pessimistic view of their future. An overall deterioration in the market situation is expected by 53% of the polled construction companies and 44% farmers. Companies in the engineering industry (where only 23% expected deterioration) and in transport (18%) regard their prospects as much brighter. Only 6% of construction companies and farmers, 15% of engineering companies, and 21% of transport companies expect improvements in the market situation.

On the other hand, companies’ expectations of demand for their products are a sign of a certain improvement in the economic outlook. Approximately one fifth of engineering companies, 18% of transport companies, and 17% of farmers expect growth in demand. The construction industry, where only 6% of the polled firms expect growing demand for services, is cautious in this respect too.

“The poll has yielded very interesting results in the segment of shippers. They are the most optimistic in their outlook and only 11% of respondent managers expect shrinking demand for services there, which is the smallest percentage among all the sectors. This is also one of the reasons why 59% of the polled transport firms plan to maintain their investments at last year’s level, while another 13% will even increase their investments,” Zdeněk Kejval, Marketing and strategy director of SGEF, commented on the results.

Engineering companies have the most daring plans for investments, with 19% of these respondents planning to increase their investments and 69% keeping last year’s levels. In contrast with the pessimistic expectations of the development of the market and demand for services, farmers also intend to invest in replacement and development: 11% of them plan higher investments and 67% maintaining last year’s level.

“Farmers have long been able to manage their finances very well. They are successful in obtaining various grants and subsidies that make it easier to invest in replacement and development. An example of the advantageous financing of farmers’ investments is our AGROÚVĚR PGRLF 3+, which minimises the cost of new farming equipment financing,” added Zdeněk Kejval.

For the polled companies, economic stagnation plus cost cutting on the part of customers are the most frequent main obstacle to investing. They also often mentioned cheap foreign competitors and the government’s bad policy. On the contrary, the companies most frequently cite product and service innovations, increased demand of customers in the end markets, expansion of production capacities and penetration of new markets as the reasons for growth in demand, which will make it possible to invest in development.