Central and Eastern European Companies Remain Upbeat About Longer-Term Business Outlook



    AMSTERDAM, Feb. 4 /CNW/ - A November 2008 survey, undertaken by the
Economist Intelligence Unit on behalf of leading global credit insurer
Atradius shows that despite concerns about the regional economy, companies do
not expect a significant deterioration of their business in Central and
Eastern Europe (CEE) in the next three years.
    Over the next 12 months, only 40% of respondents expect a moderate impact
and 30% a large or very large impact on their company's operations from the
economic downturn in CEE.
    While two-thirds of companies expect some difficulties in financing their
CEE operations, only 14% expect this to result in a reduction in their
operations in the region and only 15% are seeking to raise additional equity
finance.
    61% of respondents estimate that their annual revenue from trade and
investment in the region would increase by more than 6% over the next three
years and 90% expect annual profit growth from the region over that same
period. This may partly reflect companies' expectation that CEE economies will
begin to rebound in 2010-11 after a difficult 2009 or that many respondents
have not yet fully built the impact of the downturn into their plans.
    Firms already active in CEE are generally looking to diversify their
presence in the region over the next three years. Although Poland will remain
an important priority for companies, they are increasingly interested in the
Balkans, which has lagged the Central European markets in reform and economic
development but is set to narrow the gap in the coming years.
    The report 'Testing times - investing and trading in Central and Eastern
Europe' is the outcome of a survey of 300 senior executives from companies in
Western Europe, the US and emerging markets which currently do business or
plan to do business in CEE. This is the latest in a series of Atradius
commissioned reports focused on informing businesses of the opportunities and
risks of trade with emerging markets.
    As CEE populations are expected to fall sharply in the coming decades,
the region is at a disadvantage to Latin America and South-East Asia, where
earlier surveys revealed that companies saw growing populations as a key
advantage. The negative effects of falling populations in CEE for companies
may however be counterbalanced to some extent by the increasing prosperity of
these markets. More encouraging, 25% of respondents cite the significance of
changing technologies as an opportunity: CEE retains considerable scope for
economic development through technological catch-up with advanced economies.
    Despite respondents overall positive assessment, a range of shortcomings
in the regulatory environment were identified. Excessive or unclear
bureaucracy is still a major hindrance. Other leading concerns for businesses
include poor infrastructure, skills shortages, and rising wage costs.
Corruption is a particular source of difficulty in Romania and Bulgaria. EU
accession is generally recognized as having eased trading conditions within
the new member states, although non-tariff barriers to trade with the new EU
members remain an issue and trade with non-members has become more difficult. 
  Further steps in European integration - membership in the Schengen zone of
free internal borders and accession to the Euro - are seen as highly important
by respondents.
    A copy of 'Testing times - investing and trading in Central and Eastern
Europe' can be downloaded from the Publications section of the atradius.com
website.

    About Atradius:

    Atradius provides trade credit insurance, surety and collections services
worldwide, and has a presence in 40 countries. Its products and services aim
to help reduce its customers' exposure to buyers who cannot pay for the
products and services purchased. With total revenues of approximately EUR 1.8
billion and a 31% share of the global trade credit insurance market, its
products protect companies throughout the world from payment risks associated
with selling products and services on credit. With 160 offices, it has access
to credit information on 52 million companies worldwide and makes more than
22,000 trade credit limit decisions daily.




For further information:

For further information: Atradius Corporate Communications and
Marketing, Kathy Farley, Tel.: +1-410-246-5584, E-Mail:
kathy.farley@atradius.com


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