Small and medium-sized businesses again showed record levels of optimism in February 2024

Small and medium-sized businesses again showed record levels of optimism in February, according to data from the RSBI index (calculated by PSB, Opora Rossii and Magram Market Research based on a survey of 1.8 thousand companies). In February the figure was 57 points. It was higher only in July 2023, before the Central Bank rate increase – 57.1 points), in January – 55.8 points. The greatest contribution to the health of the business was provided by the sales component, which updated an almost five-year record (51.9 points) due to expectations (for two years they were mainly in the negative zone). The strong results are supported by expectations of revenue growth – 37% of SMEs expect it, reductions – 14%.

The actual situation with revenue is getting worse – 34% of SMEs reported a decline in sales (as in January), 18% (20%) reported an increase. At the same time, companies increased investments in February – an increase from 22% to 25%, the share of those who plan to expand their business increased – from 31% to 35% (historical maximum). Investment expectations and the continuing shortage of workers ensured an increase in the personnel component: entrepreneurs are trying to retain employees – 15% of companies had layoffs (the minimum since May 2022), 14% of SMEs were able to expand their staff compared to 12% in January, another 31% expect to attract new employees ( 28% a month earlier).

The actual investment and hiring situation will be influenced by consumer activity and credit availability. For now, the credit component is declining due to high rates. In February, 15% of entrepreneurs approved loans (12% in January), 14% of SMEs (12%) already had a loan. Unsatisfied demand increased to 11%: 8% due to refusal, 3% did not even apply due to uncertainty about approval. “If the key rate remains high, the issue of availability of lending to entrepreneurs for both current and investment purposes will become more relevant and have a negative impact on business activity,” says PSB Vice President Kirill Tikhonov.

Estimates of business activity grew at the fastest pace in manufacturing due to improved sales, and more moderately in trade and services due to a decrease in consumer activity. Depending on the size of SMEs, micro and small businesses perform better due to expectations of future sales. In medium-sized businesses, the growth rate of business activity has slowed due to difficulties with lending and hiring.

Diana Galieva