Cypriots have ‘reserved optimism’ within financial crisis, says PwC

Cypriot businesses are facing the world economic crisis with reserved optimism, confidence and realism, according to a Cyprus-wide survey commissioned by PricewaterhouseCoopers.
The survey took place in February and March and asked the opinions of 49 larger Cypriot businesses and 220 small to medium-sized enterprises. PwC collaborated with communication experts J. Loulis and J. Demakis, while the survey was carried out by Synovate Ltd.
“Cypriot businesses and the Cyprus economy in general, are called to demonstrate attributes of rapid adaptation towards the new demands,” said Phidias Pilides, Chief Executive Officer of PwC, adding that, “with professional dedication and by tapping into the knowledge and experience of our international network, we have extrovertly supported the development of our economy.”
According to the results of the survey, presented by Philippos Soseilos, PwC board member and Business Advisory Services Leader, and Stephos Stephanides, board member and Advisory Line of Service Leader, 19% of the large businesses expressed ‘great optimism’ for their business during the crisis, while 65% are ‘quite optimistic’. Among the SMEs, the corresponding rates was 13% (very optimistic) and 53% (quite optimistic).
Generally, SMEs feel greater concern and insecurity in comparison to the large enterprises, something reflected throughout the survey questions.
As regards jobs, 76% of large businesses said they will not proceed with job cuts, while only 40% of SMEs said the same. However, nearly all those surveyed the rates of job cuts will rise.
In 2009 and 2010, all businesses expect low salary increases – 47% expect 0-3%, while 25% said 4-6%.
In order to survive the crisis, 67% of large businesses said they have a strategy in place while 29% are currently planning their strategy. In the small – medium size sector the percentages are lower at 46% and 28%, respectively.
However, despite an air of confidence that Cyprus has recovered from major events in the past (economic and social recovery following 1974, EU accession in 2004, joining EMU in 2008), the PwC survey added that “an effective strategy for the utilization of opportunities and for managing the threats is required. Tactical moves (reduction of operational expenses, etc.) are essential, but are not sufficient. They do not constitute a business strategy for a long-lasting competitive advantage.”
“We are experiencing a state of psychological readiness for change. Utilising this change readiness presents an additional opportunity for solid improvement of competitiveness and effectiveness. The true winners in this crisis will be the businesses which will succeed in utilising their people effectively and offer their products and services at increased quality and reduced cost,” the survey concluded.