Thessaloniki Chamber of Commerce and Industry (TCCI), consistent to its efforts to increase information levels and inform both businesses and organizations (public or private) as well as Thessaloniki’s community, continues the periodic Survey of Economic Climate (at the Regional Unit of Thessaloniki) on the four business sectors of the economy and consumers.

The Survey of Economic Climate at the Regional Unit of Thessaloniki (TCCI Barometer) is conducted twice a year during the 2^nd fortnight of March and September, with a total sample of 1500 respondents (800 companies and 700 consumers). The survey covers all four sectors of the economy (industry, services, retail trade and constructions).

“TCCI Barometer” survey is conducted via telephone interviews with the managers of businesses (General Managers, or Finance Managers, or Sales Managers or the owners in case of “smaller” companies) and with the use of questionnaires used by the Foundation for Economic & Industrial Research and the European Union, so that the results are comparable with the equivalent National and European surveys.

1.       CONSUMER SURVEY

The “Consumer Confidence Indicator” is calculated based on consumer’s predictions for the general economic situation of the country, the economic situation of their household, the intention for saving and their prediction for unemployment levels. It must be mentioned that predictions are between +100 (all consumers anticipate an increase) to -100 (all consumers anticipate a decrease) and appear as differences between positive and negative responses. In particular, a negative difference means that the percentage of those who predict a decrease is higher than the one of those who predict an increase and vice – versa.

According to the research findings, consumers in the Regional Unit of Thessaloniki continue to be pervaded by pessimism, albeit slightly reduced compared to September 2023. Thus, the consumer confidence index in the Regional Unit of Thessaloniki stands at -27 units, showing an increase of 8 units compared to September 2023.

The survey records a slight improvement in consumer confidence in the Regional Unit of Thessaloniki, while at the national level stagnation is recorded, and at the European level, a slight increase compared to September 2023. The improvement observed at local level is based on both the improvement in the assessment of the household's and the country's economic situation over the past 12 months, as well as the strengthening of expectations regarding the evolution of the household's and, mainly, the country's economic situation in the next 12 months. Although high prices in products and energy, combined with the relatively low level of wages, continues to play a significant role in consumer confidence, there is a de-escalation of the perception of high prices in energy (the percentage of those considering electricity bills are normal rises from 28% to 40%, and the corresponding percentage for heating bills rises from 17% to 39%), as well as a slight decline in the perception of general consumer price increases: the percentage of those stating that prices have increased "a lot" in the last year decreases from 70% in September 2023 to 56% today, while similarly, the percentage of those stating that prices will continue to rise in the future at a similar or higher rate decreases from 76% to 53% today.

Overall, there is a slight improvement in all indicators reflecting consumer sentiment, except for a slight deterioration in savings-related indicators.

Specifically, consumers in the Regional Unit of Thessaloniki report:

§  Negative assessment of household economic conditions for the preceding period and relative pessimism about its further development, with a notable improvement compared to the previous six months. Specifically, the percentage of households predicting deterioration (42% from 49%) of their situation significantly decreases, while the percentage predicting improvement or stabilization increases from 47% to 52%.

§  The percentage of those stating that the general economic situation of the country improved significantly or somewhat during the previous 12 months increases from 8% to 14%. Additionally, the percentage of those estimating that the general economic situation of the country will improve in the next twelve months increases to 17% compared to 10% last September 2023.

§  Price increases were particularly noticeable throughout the past year for almost all consumers, regardless of economic status. Consumers in the Regional Unit of Thessaloniki estimate that consumer prices increased "Slightly" (6%), "Significantly" (34%), or "Very much" (56%) in the last 12 months (cumulatively, 96% have noticed an increase in consumer prices), but the percentage of those noticing that prices increased "Very much" decreases from 70% to 56%. Furthermore, the percentage of those expecting prices to continue rising at a faster pace decreases significantly (18% compared to 36% in the previous six months), as does the percentage of those expecting prices to continue rising at a similar pace (35% compared to 40% in the previous six months), while the percentage of those expecting stabilization (18% compared to 8%) or an increase at a slower pace (18% compared to 12%) increases.

§ A significant improvement is recorded regarding consumer estimates for unemployment, with 24% (cumulatively) believing that unemployment level will decrease "Significantly" or "Slightly" (compared to 11% in September 2023), while 33% expect an increase (small or large) in unemployment over the next six months (compared to 45% in September 2023).

§  There is a slight improvement - but still on negative ground - in the index evaluating the occasion for significant purchases. However, only 7% consider the timing appropriate for significant purchases such as furniture, electrical/electronic appliances, etc., remaining stable compared to September 2023. A similar minimal improvement is observed in the index of intention to make such purchases in the future.

§  The intention to save weakens considerably (20% today compared to 26% in September 2023), while the level of those stating that they save remains almost stable (26% from 27%).

§  The intention to purchase a car remains relatively stable in the Regional Unit of Thessaloniki, with 4% of consumers stating that it is very or quite likely that they will make a car purchase (similar to September 2023).

§  The intention to buy or build a house for the next 12 months remains stable (at 3% compared to 2% in September 2023), while the intention to renovate or repair/improve a house for the next 12 months decreases (to 12% compared to 15% in September 2023).  

2.       INDUSTRY SURVEY

"The 'Business Expectations Index for Industry' in the region of Thessaloniki shows an increase, returning to a slightly positive ground, very close to the highest value of the index in the history of measurements by the TCCI Barometer (September 2021).

Thus, the balance of positive-negative assessments of the 'Business Expectations Index for Industry' is now at +4 units in the region of Thessaloniki, compared to -3 in September 2023. It should be noted that this specific index reached its lowest level in March 2020 since the establishment of measurements by TCCI Barometer in March 2009, while it reached its highest level in September 2021 since the establishment of measurements by the TCCI Barometer, following a similar trend of indices both at the national and European level.

Specifically, the opinions of industries in the Regional Unit of Thessaloniki are summarized as follows:

• § Assessments for the evolution of production during the last semester have significantly improved (+11 from 0 in September 2023, at the highest level in the history of measurements by the TCCI Barometer), while assessments for the evolution of production in the immediate future concerning the Regional Unit of Thessaloniki have improved impressively (+37 compared to +16 in September 2023, close to the best level in the history of measurements by the TCCI Barometer recorded in March 2023).
• § The management of inventories and the productive capacity of industries are performed satisfactorily. Moreover, the assessment of the current operational level of productive capacity is at its highest level since the establishment of measurements by the TCCI Barometer (79% compared to 76% in September 2023), and the secured months of production based on orders reach 4.7 (also at the highest level since the establishment of measurements by the TCCI Barometer).
• §  Assessments for the future regarding the level of exports are slightly worsened but remain clearly positive (+16 from +22 in the previous semester).
• §  Assessments for further price increases in the next semester remain steady, while assessments for the evolution of employment in the next period are significantly reinforced (+19 from +11, at the highest point since the establishment of measurements by the TCCI Barometer).
• §  The lack of labor force appears in the 1st place as the main restrictive factor for the production of businesses (39% compared to 32% in the previous semester), while financial constraints are recorded in the 2nd place with decreased references (34% compared to 40% in September 2023), and in the 3rd place, the reference to limited demand is recorded (32% compared to 34% in September 2023)."

3. SERVICES SURVEY

With a notable increase and reaching its highest level since the beginning of the TCCI Barometer measurements, the Business Expectations Index in the Services sector is recorded.

More specifically, the relevant "Business Expectations Index" for the Services sector is recorded at +27, compared to +18 in the previous semester.

In particular, service-providing businesses in the Regional Unit of Thessaloniki report:

• §  A positive outlook regarding the evolution of their business situation (at +5 from +9 in September 2023), while the assessment of demand evolution in the past semester is recorded at a historic high (+38 from +22 in September 2023).
• §  Very positive expectations for demand evolution in the next semester (+38 today from +22 in the previous semester).
• §  Positive estimations for employment evolution in the sector in the next semester (almost stable compared to September 2023), while a significant increase in prices is also expected for the next semester.
  

4.       RETAIL TRADE SURVEY

Climate among Retail Trade businesses in the Regional Unit of Thessaloniki remains almost unchanged compared to September 2023, with the "Business Expectations Index for Retail Trade" steadily hovering around neutral territory.

Thus, the balance of positive-negative assessments of the "Retail Trade Business Expectations Index" stands at +2 (from +1 in September 2023).

Specifically, the opinions of retail businesses in the Thessaloniki Region are summarized as follows:

• §  The assessment of sales evolution for the past semester deteriorates (from -6 in September 2023 to -15 today). However, sales expectations for the next 6 months remain positive and rebound significantly (from +22 today from +7 in September 2023). Furthermore, expectations for order evolution in the next semester rebound back into positive territory (from -7 in September 2023 to +4 today).
• §  Additionally, they anticipate an increase in employment in their sector for the next period, while the trend for moderate price increases in the immediate future is also evident here.
  

5.       CONSTRUCTION SURVEY

The Business Expectations Index in the Construction sector rises to its highest level in the history of the TCCI Barometer measurements.

Consequently, the balance of positive-negative assessments of the "Construction Business Expectations Index" stands at +14 units in the Thessaloniki Region (compared to -2 in September 2023).

Specifically, the opinions of construction businesses in the Thessaloniki Region are summarized as follows:

• §  Estimates for the evolution of construction activity over the previous semester are further reinforced for the 4th consecutive semester, reaching the highest level since the beginning of the TCCI Barometer measurements, at +38 units today (from +28 in September 2023).
• §  Significant improvement is observed (at the highest point in the history of TCCI Barometer measurements) regarding current levels of orders in the Construction sector.
• §  Strong positive estimation continues for the evolution of employment in the sector for the next 6 months, along with an upward trend in price evolution at the local level. Moreover, the lack of labor force dominates as a restrictive factor for the construction activity of sector businesses (60% of relevant reports), followed by financial constraints (46%), while limited demand is now reported by only 12% of businesses (compared to 23% in the previous semester).

6.  TCCI Barometer – AD HOC CONSUMER QUESTIONS

Aiming at the optimum use of "TCCI Barometer" as a research tool with a view to better inform the business community of Thessaloniki, new ad-hoc questions were incorporated in “TCCI Barometer’s” questionnaires. The questions were placed at the end of standardized questionnaires used "TCCI Barometer" to ensure continuity and reliability of the results of "TCCI Barometer".

·    Electricity bills

The percentage of households characterizing their electricity bills as manageable and stating that they do not face difficulty in paying them increases significantly compared to September 2023 (40% versus 28% in the previous semester). At the same time, the percentage of households characterizing their electricity bills as unaffordable and being unable to repay them decreases to 6% (from 11% in September 2023 and 25% in March 2022), while the proportion of those considering the electricity bills as high and struggling to repay them remains majority (51%) but shows a clear decline compared to the previous semester (59%).

·    Heating bills

Here too, the percentage of households characterizing their heating bills as manageable and stating that they do not face difficulty in paying them increases significantly compared to March 2023 (39% versus 17% in the previous semester). At the same time, the percentage of households characterizing their heating bills as unaffordable and being unable to repay them decreases to 7% (from 14% in March 2023 and 25% in March 2022), while the proportion of those considering the heating bills as high and struggling to repay them remains majority (50%) but shows a clear decline compared to March 2023 (65%).

·    Fly Over - Freight Handling – Metro

More than 4 in 10 consumers in the Regional Unit of Thessaloniki (43%) state that they have been "Very" or "Somewhat" negatively affected by the construction works of the elevated Regional Road of Thessaloniki (Fly Over). Additionally, about 4 in 10 (43%) mention that their movements within Thessaloniki are "Very" or "Somewhat" affected by freight handling in stores and businesses.

Two-thirds of consumers in the Thessaloniki Region (67%) indicate that they intend to use the Subway (Metro) for their movements when it becomes operational. Moreover, the majority of them state that they will use the Metro occasionally either for shopping/entertainment purposes (60% of those intending to use the Metro) or for professional reasons (11%). Systematic use of the Metro for commuting to work (15%) or for shopping/entertainment (11%) is mentioned cumulatively by approximately 26% of those indicating they will use the Metro (or about 17% of consumers in the Regional Unit of Thessaloniki).

·    Evaluation of the Quality of Available Greek Private Label Products

The majority of surveyed consumers positively evaluate the available Greek private label products: approximately 1 in 2 (49%) characterize their quality as "Very Good" (8%) or "Good" (41%), while only 9% rate it as "Poor" (7%) or "Very poor" (2%), with 35% describing the quality as "Average". 

7.  TCCI Barometer – AD HOC ENTERPRISES QUESTIONS

Aiming at the optimum use of "TCCI Barometer" as a research tool with a view to better inform the business community of Thessaloniki, new ad-hoc questions were incorporated in “TCCI Barometer’s” questionnaires. The questions were placed at the end of standardized questionnaires used "TCCI Barometer" to ensure continuity and reliability of the results of "TCCI Barometer".

·   Raw materials / Products

Overall, nearly 1 in 4 businesses (27%) in the Regional Unit of Thessaloniki report problems with shortages of raw materials or products in the market (similar to September 2023, compared to 40% in March 2023 and 50% in September 2022 and 43% in March 2022), either to a small extent (21%) or to a large extent (6%).

·   Major Concerns for local Businesses

High tax costs take the lead in reports for the two most significant problems faced by businesses in the Regional Unit of Thessaloniki (37% compared to 29% in September 2023 and 20% in March 2023). The high cost of energy and fuel retreats to the third position (25% compared to 38% in September 2023), while the second position is held by the cost of raw materials/products (27% compared to 30% in September 2023). Reports on limited demand (16% compared to 17% in September 2023) and liquidity (15% compared to 14% last September) remain almost stable. It is noted that the high labor cost (salary and non-salary) is now reported cumulatively by 19% of businesses, compared to a cumulative percentage of 13% in September 2023 and 12% in March 2023.

·    POS Devices

Approximately 2 out of 3 businesses (67%) in the Thessaloniki Region state they have installed at least one POS device. Moreover, 64% of businesses are aware of the obligation to have a POS device, and 40% of the obligation to link the POS device to their cash registers. However, the percentage of businesses stating that they have linked the POS devices with the cash registers stands at 30%.

·   Candidate Employee Skills

Curiosity and willingness to learn are considered the most significant among six different skills assessed for employees sought by businesses in the Regional Unit of Thessaloniki. They are followed by passion for their work, teamwork, and adaptability at approximately the same level, with communication skills and self-confidence coming last. About 1 in 3 businesses (34%) believe that the skill level of workforce is higher in Attica compared to the rest of the country, while 39% disagree with this opinion, and 27% have no opinion. Finally, 2 out of 3 businesses (66%) in the Regional Unit of Thessaloniki state that their staff needs training in skills and professionalism.

Thessaloniki, April 22nd, 2024

PALMOS ANALYSIS