HUP: 3 in 5 employers expect stagnation or fall in revenue in 2021

NEWS 22.12.2020 17:12
Source: N1

A majority of employers (60%) expect the same or even lower revenue in 2021 and more than 40% support the abolishment of excessive levies, shows a survey conducted by the Croatian Employers' Association (HUP) among its members.

The survey, conducted between 25 November and 4 December, was aimed at gaining insight into business results for 2020 considering the impact of the COVID-19 pandemic on business and to get information on businesses’ expectations for 2021.

The main problem entrepreneurs see is the “absence of structural reforms, uncertainly and huge burdens by various levies as well as difficulties in accessing finances for liquidity during the coronavirus crisis,” HUP underscored said presenting the findings on Tuesday.

This business association added that that following an exceptionally turbulent 2020 an uncertain 2021 is to follow.

60% expect a fall in revenue or equal to this year

In addition to 65% of those surveyed who expect a fall in revenue this year compared to 2019 as many as 60% expect the same or even lower income in 2021 compared to 2020. A mere five percent of companies said that the COVID pandemic had not affected their business, HUP underlined.

Noting the most important steps the government could take to contribute to a successful business year in 2021, 43% of those polled are hopeful of a significant reduction or abolishment of non-taxable or parafiscal levies, while 19% expect better access to EU funds.

Entrepreneurs expect a transparent notice from the government of its plans for next year.

They said that the announced fifth round of tax reductions will make the biggest contribution to business in 2021, primarily reducing income tax brackets. At the same time entrepreneurs consider restrictive anti-coronavirus measures to be the biggest problem to business operations in 2021.

HUP said that in 2020 the biggest fall in GDP and commercial activities was recorded in the past 20 years.

This was on the most part caused by reduced consumption and exports, primarily services, HUP said, adding that the consequences of the coronavirus epidemic would cause a fall in GDP which is expected to be more drastic than in the majority of other EU member states.

“However the thing that is most obvious is that the health crisis is not close to being resolved yet and it is difficult to expect any economic growth in 2021. Expected growth in the second half of 2021 and in 2022 will remain under great uncertainty and unequal recovery through various sectors,” HUP underscored.

HUP noted that the export sector managed to maintain a certain level of competitiveness during the height of the crisis, adding that a stronger step is needed to strengthen the production sector to be able to stand up to its competitors in other EU countries.

Job retention measures prevent labour market from collapsing

HUP said that the government jobkeeping measures managed to prevent the labour market from collapsing.

It warned however that 2021 will be challenging with regard to increase employment due to the usual tardiness in the market recovering and limited availability of an adequate labour force on the domestic market and due to the potential restrictions of seasonal employment caused by the uncertain recovery of tourism.