Coface CEE Top 500 Companies - 2017 edition
After some slowdown experienced in the Central and Eastern Europe (CEE) region in 2016, the GDP growth with 2.9% was quite stable. The economic development however showed a diverse picture. Labour markets continued to improve, resulted in unemployment rates that have reached the lowest levels ever recorded, most notable Czech Republic with 4.0%. Rising wages and low inflation, along with improving consumer sentiment have made household consumption the main driving force behind economic expansion, which positively impacted some sectors in CEE.
The top companies in the region experienced a minor decline in turnover by -0.6% to 580 billion EUR and decreased their net profit even more by -3.1% to 26.3 billion EUR. This is one of the results on the latest CEE Top 500 study, ranking the 500 biggest companies in the region, measured by turnover.
In contrast to the decrease in turnover and net profit, employment rates boomed. The companies of the CEE Top 500 employed 4.5% of the total labour force in the region and significantly strengthened their workforce by +3.9% to 2.24 million people. This evolution had a positive effect on the unemployment rates in the region.In ten countries the unemployment ratesdecreased by even more than 10%, most notable Hungary with -25.0% and Czech Republic with -21.6%. In most of the CEE countries unemployment rates are even lower than in Western European countries now. Estonia is the only country which registered higher unemployment figures (+9.7%).
The analysis by sectors shows a changing market. Traditional industries are declining, and new ones are ready to take over. The decrease in turnover of the biggest 500 companies can be attributed to four sectors: Oil & gas, Energy, Mechanics & precision and Metals. Their revenue losses were too large to be offset by the positive performance of other sectors. On the one hand after years of Oil & gas being the biggest industry in the Top 500 ranking, the sector lost in turnover due to the difficult global commodities market. On the other hand, automotive and transport took over the first rank in both, the number of represented companies and in total turnover. Revenues rose by +8.6% and net profits increased by +6.8%. This result is due to a very favourable economic environment with increasing demand and weakened competition.
Growth in CEE economies is expected to regain strength following last year’s slowdown. Coface forecasts that the average Central and Eastern Europe GDP growth rate will increase to 3.4% in 2017 and 3.3% in 2018. Both years will be fueled by stable growth in private consumption, supported by continued improvements on the labour market. Households have already experienced an increase in prices. This shows a reversal of the deflationary period recorded in many economies over previous quarters.
- CEE Top 500 Analysis
- The Ranking - CEE Top 500
- Economic Outlook - incl. Top 10 in Russia and Ukraine
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