We continue to systematically monitor the sectoral performance of small and medium sized enterprises (SMEs) through the BIC Index and the BIC Rating System. Based on a sample of over 19,000 small and medium sized corporations from all sectors of economic activity, in 2017, the small and medium sized entrepreneurship continued to track positive performance.
For the general index of overall sectoral performance, BIC Index recorded a new high level at 44.4 points in 2017 from 43 in 2016. The improvement came from a better performance in average liquidity and capital structure. However, the average efficiency of SMEs, which reflects their profitability, was nearly stable in 2017 compared to 2016.
At this point, we would like to make two qualifications regarding our findings. First, we are aware of the survivorship-bias that has likely affected our results, as the weakest corporations 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 have been relaxed, which may skew the sample toward the high-quality end of the Greek corporate spectrum.
A new element of this year’s edition is the revision of the sectoral performance of the SME rating system, and we introduce the BIC Rating System v. 1.02. The previous version was based on observations of the period 2007-2012, which included both years of growth and recession. Since then, the Greek economy and entrepreneurship underwent phases of recovery; however, it also faced the implementation of capital controls. Wanting to incorporate the developments of Greece’s economic cycle since 2012, we are led to review the thresholds of the BIC Rating System. Therefore, we continue to assess the performance of a sector both at a cross-sectoral level and a time level through a fixed but revised quantitative frame of reference.
According to the new sectoral rating system (BIC Rating System v. 1.02), in 2017, the average cross-sector rating remained “a-”, as in 2016, the best rating since the BIC Index was first compiled in 2007.
Among the top performers in 2017, once again were the tourism-related sectors, such as water transport (i.e., passenger ferries) (50) and food and beverage service (56). Quarrying and mining (B) retained the improved average performance of the previous 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 air transport (51), the wood industry (16), and the manufacture of furniture (31).
