Survey: SMEs most concerned about profits, low demand

Global insurer Zurich Insurance Group released its extensive study titled “Key risks for small and medium enterprises (SMEs) in 2015” after polling 3,000 top executives from SMEs in 15 countries.

While profitability ranks as the top concern for Turkish SMEs, with 34.5 percent of managers citing it, poor consumer demand came in second place with 22.5 percent. Failures in the supply chain were the third biggest challenge for Turkish SMEs, according to the survey.

The survey came amid hot debates over who should assume the bulk of the burden that will emerge after a possible mandatory hike in the minimum wage. The Justice and Development Party (AK Party) promised to increase the base wage in the run-up to the Nov. 1 election through which it gained majority power, but is now passing the buck on to business owners despite huge resistance from employers.

On the sidelines of the G-20 summit on Nov.15, President Recep Tayyip Erdogan called on businesspeople to take a pay cut and share their profits with employees, though unions stressed that the Turkish private sector, and especially SMEs, have long been suffering from declining profits. SMEs are responsible for 74.2 percent of total employment in Turkey, according to latest government data.

Shrinking margins and weak demand along with legal and fiscal problems were the biggest challenges for SMEs on a global scale, the survey indicated.

In the meantime, Turkish SMEs also reported that troubles pertaining to logistics and transportation procedures are of great concern, specifically for export companies.

While political and economic woes in Turkey’s neighbors were ranked among the biggest risks by a mere 5 percent of the Turkish SMEs polled last year, the corresponding ratio rose to 10 percent in 2015.

SOURCE: TODAY’S ZAMAN

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