Entrepreneurs gear up for trouble

Young businesspeople expect a worsening of the economic climate – but they are also convinced of being able to weather the turmoil.

The Association of Young Entrepreneurs said yesterday (Tues) it interviewed 2,200 self-employed Austrians in the past weeks. Around seven in 10 of them expect a new crisis but only two per cent fear being incapable of getting through it.

The interviewed businesspeople – who are all younger than 40 – also identified personal savings and subsidies as their main funds. The new survey reveals that 77 per cent of them said restrictions in borrowing money from banks were the biggest hurdle in starting a business.

Almost 30,000 companies are established in Austria each year. KSV 1870 (KSV), an organisation for the protection of creditors, said last month that the number of Austrian business bankruptcies declined by eight per cent from 2010 to 2011 when 5,856 firms went bust. KSV stressed that this development represented a decrease of 15 per cent. KSV said it did not expect an increase this year. The association announced: “Politics and the EU (European Union) might suffer a crisis at the moment, but not the domestic economy.”

KSV’s figures also reveal that the number of private bankruptcies shot up by more than six per cent from 2010 to 2011 when nearly 9,600 Austrians declared themselves broke. Lower Austria recorded the strongest rise of private bankruptcies in 2011 at 22 per cent. Lower Austria is located in the north-east of the country. It is Austria’s most populous province.

The Association of Young Entrepreneurs’ investigation came shortly after a poll by OGM showed that 14 per cent of Austrian businessmen feared a crisis scenario for 2012. Thirty-nine per cent said they braced themselves for volatile developments while 38 per cent explained they expected the domestic economy to achieve solid growth. Only four per cent said the Austrian economy would rapidly grow in 2012.

The Viennese Institute for Economic Research (WIFO) said last month that it expected the Austrian gross domestic product (GDP) to rise by 0.4 per cent from 2011 to 2012. Only in September, WIFO predicted a growth rate twice as high. WIFO also said in December that the average GDP of the Eurozone’s 17 member states would not achieve any growth in 2012 – a year which could, according to the research group, feature periods of recession.

Pollster Imas found in October that a majority of 52 per cent of Austrians expected the Eurozone debt crisis to have effects on their lives. Another 18 per cent told the public opinion agency they already felt affected by the negative economic developments. Only 17 per cent said they were not bracing for an impact on their personal or professional lives. Asked whether the struggle of the Eurozone to remain competitive might affect the economic power of Austria, 42 per cent said the damage was already done. Around 34 per cent predicted negative effects on the domestic economy while just 10 per cent ruled out any impact.