piraeus bank group

Small and medium-sized entrepreneurship: monitoring last decade's performance

The Department of Economic Research and Investment Strategy of Piraeus Bank has been systematically monitoring the sectoral performance of small and medium-sized enterprises (SMEs) for a decade, from the pre-crisis period up to date, using the sectoral assessment system of the Greek small and medium-sized entrepreneurship that it has developed, and has recorded their turbulence caused by the deep recession, as well as their efforts towards stabilisation and recovery.

The positive momentum that we recorded for the first time in 2015 carries over into 2016, given that the majority of sectors that we identify as strong performers maintain their strong position with many more sectors joining them for the first time. As a result the average cross-sector rating is “a-” matching the average rating in 2015 and 2007. As a consequence the BIC Index – the general index of overall sectoral performance – rose to 43 points from 40.5 in 2015, recording improvement in all dimensions (efficiency, liquidity and capital structure).

At this point, we would like to make two qualifications regarding our findings. First, we are well aware of the survivorship-bias that has probably affected our results, as the weakest corporates are eliminated from our sample and only the ones with the best balance sheet structure and management skills survive. Second, the requirements for the publication of financial statements are being relaxed which again may skew the sample towards the high quality end of the Greek corporate spectrum.

Among the top performers in 2016 were tourism-related sectors, such as water transport (i.e. passenger ferries) (50) and food and beverage service (56), while real estate (68) retains a positive performance for yet another year. On the other hand, low performers included leisure-related sectors, such as arts and entertainment (R) and mass media (59+60), as well as consumer goods, such as manufacture of furniture (31) and apparel (14), trade of vehicles (45) and tobacco industry (12).

The retained positive performance of SMEs continues showing optimistic signs. However, since the macroeconomic environment is still in the stage of stabilisation, we remain alert as to whether this positive momentum will continue on to our next annual report.