Small business lost sales and personnel – Newspaper Kommersant No. 215 (7416) of 11/21/2022

The October RSBI index was 48.5 points, which means the second consecutive month of decline in business activity of small and medium-sized businesses – it returned to the indicators of spring 2022. Such a fall is the reaction of the owners and top managers of 1,796 companies in the sector from all regions of the Russian Federation to “geopolitical and economic processes,” the authors of the study from PSB, Opora Rossii, and the Magram Market Research agency explain. As part of the index, only the loans component showed some growth. “The share of those who could not get a loan or were not sure of its approval fell to 11.3%, the lowest for the entire time of observation,” the authors note.

All other components of the index declined markedly. Thus, sales have been falling for more than a year, but in October this decline had the strongest effect on the result of the overall index. Both actual indicators and expectations worsened. 47% of respondents already report a drop in revenue, and in the next quarter only 19% of respondents (2% less than in September) expect its growth (2% less than in September), while a decrease – 36% (3% more). In October, the assessment of the personnel situation went into the negative zone – to a minimum since May 2020. Only 8% hired new staff (3% less than in September), while the share of those who reported layoffs in October was 21% (5% more than in September). The investment index remained in the growth zone, but rolled back to the level of November 2020. In October, the share of those investing in business expansion fell by 7% to 14% (the lowest since summer 2020), while the share of respondents who reported a reduction in investment spending increased to 11% (3% more than a month earlier). In the next quarter, 21% of respondents intend to increase capital investments (4% less than in September), 6% are ready to reduce investments in business (no change).

Against this background, the business activity of SMEs decreased most noticeably, while the value of the microbusiness index continued to tend to the lows of the year, but more smoothly due to the greater stability of expectations. Industrial SMEs were more confident than others, with their business activity growing, although less confident (due to pessimism in investment and assessment of the state of the workforce, see graph). In trade and services, a pronounced decline in business activity began, largely due to pessimism about future sales.

Artem Chugunov