Report: Growth of New Companies in Decline in Greece

Endeavor Greece Finds New Company Formation Down 50% Since 2008

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Athens – February 1 – Endeavor Greece issued a new report on company formation based on data from General Commercial Registry (GEMI), which found a 50% drop in the number of new companies formed in 2016 from those in 2008. The report also found that the 28,615 new companies registered in 2016 represented a 33% decrease from 2012. This dramatic drop is part of a growing imbalance between company formations and closures, with company closures surpassing company formations for the first time in 2016 by 6,500. 

Despite the sharp drop in Greeks’ disposable income, local entrepreneurial ventures remain largely focused on non-productive and introvert sectors, such as restaurants/bars/catering and retail. One exception, however, is the tourism industry, which demonstrated not only a significant increase in the number of new companies (+31% between 2012-2016), but also a clearly positive balance between new companies and those that closed.

The survey also showed that 84% of new companies in Greece continue to focus on introvert sectors (e.g., restaurants, bars, coffee shops, accounting/consulting services). While this percentage is lower than that in 2012 (88%) — indicating more companies forming that will bring in international revenue — the marginal difference is not sufficient to accelerate transformation of Greek economy and rapid job creation.

The researched revealed the following patterns in company growth and decline during 2016:

    • Restaurants, bars, catering, food retail: 5,613 new companies, decreased by 41% in comparison to 2012
    • Other retail: 3,200 new companies, decreased by 49% in comparison to 2012
    • Tourism & Travel: 1,347 new companies, increased by 31% in comparison to 2012
    • Construction: 1,320 new companies, decreased by 25% in comparison to 2012
    • Manufacturing: 1,192 new companies, decreased by 29% in comparison to 2012
    • Accounting & Consulting Services: 966 new companies, decreased by 16% in comparison to 2012

Apart from tourism, the vast majority of sectors have suffered drops larger than 30% on average. The energy sector alone decreased by over 90%. 

The report also examined the balance between company formation and closures per sector for 2016, and found there to be decline in the following sectors: 

    • Retail (955 more closed companies than registrations)
    • Construction (640 more closed companies than registrations)
    • Manufacturing (424 more closed companies than registrations)

The ratio was was positive, however, in tourism, medical services, agriculture, financial services, and restaurants/bars/catering.

New companies in extrovert sectors have decreased in absolute figures but marginally increased as percentage of total registrations, accounting for 16% in 2016 vs. 12% in 2012. 75% of this increase is attributed to tourism.

After eight years of recession, Greek economy continues to seek a new stable equilibrium position. However, with the only exception of tourism, it has not managed to overcome introversion and focus on domestic consumption. Greece risks being trapped in stagnation, driven by sharp decline in healthy business formation, which is the only solution for mid-term drop in unemployment rates and reversal of brain drain. 

View an infographic of the report’s findings here.

For more information, please contact Anna Zilakou, Communications and PR Manager, Endeavor Greece, [email protected], +30 697 8870661, www.endeavor.org.gr