95% of Bulgarian Companies Saw Drop in Sales in 2009

Bozhidar Danev has called 2009 a year of economic winter and 2010 a year of survival. Photo by BGNES

A total of 95% of Bulgarian firms saw their sales decline in 2009 as a result of the global economic crisis, according to the fifth annual survey of the Bulgarian Industrial Association.

The results of the survey “2009 in the Eyes of the Business” were presented Monday by the BIA Chair, Bozhidar Danev.

80% of the respondents – which are all members of the BIA – have said that their firms had reduced their output. 52% of the Bulgarian businessmen expect a worsening of the crisis in 2010, 45% expect improvement, 3% abstained from making forecasts.

38% of the firms have stated their intention not to cut the salaries of their employees, while 42% are undecided.

Danev forecast that by the end of 2010 the unemployment in the country will be 16,4%. He got this figure by adding 5% of “unofficial” or unregistered unemployment to the government forecast for an unemployment rate of 11,4%.

“Our data show that we have gone back to the 2005 level in our economic development. We have wiped out three successful years. The November figures show we are at the 2005 level, and our economy continues to decline. During the third quarter of 2009 we had a GDP decline of 5,9%. The rate of economic decline has still not slowed down. It is as if we had an economic winter in 2009,” Danev declared.

The BIA Chair said the export-oriented sectors had borne the brunt of the economic crisis because it came to Bulgaria from abroad. These are the machine building and shipbuilding sectors, as well as construction and transport in addition to them.

The food industry, agriculture, and production of pharmaceuticals are doing better but they are oriented mainly towards the domestic market.

The BIA data shows that the state is one of the major generators of corporate debt. The Bulgarian stat owes BGN 2 B to private companies under public procurement procedures.

Danev called 2010 a year of survival, and recommended that companies limit their investments and in some cases switch to other products.

He called upon the business sector to retain its qualified workers because the wider EU market could suck them out.