Analytics, Baltic Export, Investments, Markets and Companies

Lithuania has the highest share of optimistic businesses – as many as 20% of respondents in Lithuania expect their sales to grow more than 15% this year. In Latvia 16% of SMEs expect a sales increase steeper than 15% and 56% believe their sales would increase up to 13%. A notable rise to 28% was observed for SMEs in Latvia and Estonia which expect their sales to drop this year.

Edmunds Rudzitis, a socioeconomics expert with SEB Banka, said that uncertainty and risks in the global economy as well as geopolitical tensions continued affecting sentiment among SMEs.

The upbeat forecasts were made mostly by agricultural enterprises (31%), as well as providers of hospitality and food services (26%). SMEs operating in the construction and manufacturing industries were the most pessimistic (36% and 35% respectively).

Availability of EU funds and delay in distribution of the funding under most programs is a factor with significant adverse effect on the future outlook by SMEs.

The survey showed that as many as 40% of Latvian SMEs do not plan any investments this year, which is much more than in Estonia (24%) and Lithuania (22%). In Latvia, 16% of SMEs are planning investments of up to EUR 30,000 this year, while investments over EUR 30,000 are planned by 13%. There are 40% of Lithuanian companies and 38% of SMEs in Estonia, which have planned investments this year.

However, most Baltic SMEs do not plan to change their business model and only 8% will make investments to this end. The share of businesses willing to invest in innovation is growing. While Latvia still lags behind its Baltic neighbors, the share of Latvian SMEs considering investments in innovation has risen to 59% from 39% the year before.

SEB group carried out the survey in fall 2015, interviewing representatives of 5,119 companies, including 3,702 in Estonia, 886 in Latvia and 531 in Lithuania, about their plans for 2016 concerning sales, export, investments, number of employees etc.