Analytics, Baltic, Employment, Financial Services, Investments, Markets and Companies, Wages

The most optimistic sentiment was reported by Latvian enterprises: 57% of them rated the business conditions for their enterprises as favorable and stable at the moment. In Lithuania, the same view was shared by 52% of CFOs, whereas Estonia had more of those considering the business environment to be average (53%) and fewer optimists than its neighbors to the south, just 37%.

Sixty-nine per cent of those surveyed rated the financial situation of their enterprises as very good. High ratings point to the effectiveness of the measures taken during the crisis, since the stabilisation of their financial situation is a matter of survival for some entrepreneurs. Nonetheless, 8% pointed out that their financial situation is currently weak, whereas 23% deemed their situation satisfactory, which shows that any positive post-crisis trends are yet to deliver a full recovery.

Allan Parik, Head of SEB Baltic Corporate Banking: "It follows form the survey that labor costs are a serious concern for Estonian entrepreneurs. A decline in the unemployment rate has generated pressure on wages / salaries, which poses a hazard to competitiveness. Pressure is also growing gradually and constantly in Latvia and Lithuania, adding urgency to the problem there as well. Unemployment in all of the Baltic States is decreasing, whereas the shortage of skilled workers keeps growing. Forecasts indicate that this problem is one of the critical challenges of the near future."

"In their assessment of cash flows, CFOs of the largest enterprises in the Baltic States are very pragmatic, predicting stable or slight growth. Twenty-four per cent of respondents voiced their conviction that their cash flows would remain at the same levels, with 47% believing that any growth would not exceed ten%. CFOs in Latvia and Lithuania are likelier to forecast higher turnover growth for their companies: 22 and 20%, respectively. In Estonia, the same view is shared by only 12% of respondents," Parik added.

CFOs of the largest enterprises in the Baltic States also noted that, given a good financial situation, the main options are either going ahead with new investments or reducing liabilities. Forty-four% of CFOs in the Baltic States would prefer to invest, whereas 27% would prefer to reduce the debt of their enterprises. Latvia's larger enterprises would specifically prefer to reduce debt, whereas according to entrepreneurs in Estonia and Lithuania the main scenario is investment in developing entrepreneurship.

SEB conducted the survey of CFOs of the largest enterprises in the Baltic States in late February and early March of 2014. Respondents in the survey included 200 large enterprises from Estonia, Latvia and Lithuania.