Small and medium-sized enterprises in the Czech Republic are showing signs of improvement, evidenced by a significant increase in investment activity, which has reached its highest level in five years. According to a survey conducted by the Československá obchodní banka (ČSOB) Business Expectations Index, companies and sole proprietorships are increasingly inclined to adopt new technologies and invest in cost-saving measures, such as digitisation and innovation, to improve their offerings to customers.
The survey found that 42% of the companies surveyed are satisfied with the economic performance of the Czech Republic, thus encouraging an increasing propensity to invest. The two external influences that support companies in their business are the development of new technologies and artificial intelligence. Sustainability is also gaining importance, as it represents an opportunity for future efficiency gains. In contrast, the main difficulties arise from input costs, the labour market, legislative changes, war conflicts and the weakening of the crown against the euro. In more detail, 22% of the companies surveyed feel very threatened by the current energy and raw material prices, 21% by the lack of qualified employees and 17% by the changing economic situation in the country.
According to the Index of Business Expectations, a measurement tool that collects and analyses company expectations on various aspects of their business, the Czech economy is destined for a necessary transformation towards a more technologically advanced, innovative and sustainable model. In fact, the index increased by six points compared to the autumn, reaching a value of -0.6 points. This improvement was mainly influenced by the investment sub-index, which grew by 18 points to 3.2 points, a level not seen since the second quarter of 2019. In fact, 42% of companies and entrepreneurs plan to increase investments, showing some optimism about the expansion of business activities, while 14% expect to keep their volume unchanged. However, despite the increase in investment, a deterioration in demand for goods and services was observed compared to the autumn.
With this in mind, the ČSOB decided to take a closer look at companies’ relationship with innovation and the external influences acting on business. According to Pavel Prokop, Executive Director of Corporate Banking at ČSOB, companies and entrepreneurs are not going through an easy time and there are still many risks associated with their activities. However, he emphasises that in order to maintain long-term competitiveness, Czech small and medium-sized companies must invest in innovation, reduce the use of materials, and pay more attention to emissions and energy consumption. Prokop welcomes the fact that many entrepreneurs are already moving in this direction, recognising them as the backbone of the Czech economy and the greatest potential for driving its future growth. In addition, Prokop stated that the bank works with companies in all those sectors that offer or are offering profitable skills and financing options. In fact, from 2022, it was the first to open accounts for corporate customers exclusively online, using the internet of Česká exportní banka (ČEB) and ČEB Mobile banking. The service also includes a Virtual Branch, which facilitates secure communication with the bank by creating a modern network of specialised branches with experienced bankers available for personal meetings and consultations with customers. Against this background, last year the ČSOB increased the volume of loans to small and medium-sized enterprises by 3% to CZK 99.7 billion.
The increase in investments by Czech SMEs shows a positive trend, supported by the opportunities offered by the ČSOB. As also stated by Pavel Prokop, innovation and sustainability help to maintain competitiveness in the long term, so the ČSOB is committed to supporting companies in strategic sectors by offering expertise and advantageous financing options to help develop their businesses. These initiatives represent a significant step towards a more advanced and sustainable economic transformation for the Czech Republic.
Source: https://www.patria.cz/zpravodajstvi/5895456/csob-index-ocekavani-firem-optimismus-podnikatelu-a-firem-roste-chut-investovat-je-nejvyssi-od-roku-2019.html https://www.idnes.cz/ekonomika/domaci/firmy-ocekavani-ekonomika-investice-hdp.A240514_094855_ekonomika_ven
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