More than 4/5 of SMEs in Albania operate in the services sector with 60 percent involved in the trade, bar, restaurant, hotel industry, according to census data
TIRANA, Jan. 31 – More than 6,000 businesses nationwide have closed down during the past two years reflecting the global crisis impacts as domestic consumption slows down on higher basic food products and falling income. The conclusion is revealed from the latest census conducted by the country’s state institute of statistics, INSTAT, in Nov. 2011 and previous data from the official Business Register.
Data gathered from the housing and population census also measuring the number of enterprises show some 103,038 active businesses were reported at the end of 2010, down from 109,267 at the end of 2009 as revealed in INSTAT’s Albania in Figures 2010 report.
Census data show around half of 103,000 businesses were created during 2005-2009 with 50 percent of them operating in the country’s biggest Tirana and Durres regions, which according to the latest census data have a total resident population of 1 million people compared to 2.8 million nationwide.
More than 4/5 of SMEs in Albania operate in the services sector with 60 percent involved in the trade, bar, restaurant, hotel business. Women manage around a quarter of total businesses in Albania, 99 percent of which are SMEs, and make up 45 to 48 percent of employees in the industry and services sectors.
Big enterprises employing more than 50 people contribute to 42 percent of total employment although representing a mere 1 percent of total businesses.
Some 2,739 of total enterprises in Albania are either wholly foreign owned or international joint ventures, with 64 percent of them operating in the services sector.
Introducing the census findings, INSTAT director Ines Nurja said the collected data would serve to establish the register of local economic units, also a request from Eurostat, the statistical office of the European Union, making available the much needed statistics for the further development of the country’s 12 regions.
“The registration of non-agricultural economic enterprises is aimed at bringing updated statistical registers of enterprises, under EU recommendations and standards, for the production of reliable, accurate and useful economic statistics,” said Ines Nurja.
2/3 of businesses with one employee
The most surprising data coming from the poll is that around 2/3 of businesses, 62.7 percent of them, are run by self-employed people, meaning a single person.
Researchers of the Open Data Albania centre say micro-enterprises with up to four employees have proven to be short-lived managing to survive by 2 to 5 years. The key reason these enterprises with up to four employees, but accounting for 90 percent of total businesses are short-lived is because they fail to grow remaining with the same number of employees. “These enterprises with a minimum number of employees are so widespread and fragile that every economic fluctuation and instability could immediately make them go bankrupt or encounter difficulty because they have no reserves or business plans covering or foreseeing the near future,” said an Open Data researcher earlier.
Currently, industry, trade and services are the top employers while crisis-hit construction industry has dropped to fourth place. A majority of 82 percent of total employees in Albania work in the private sector. According to a recent Italian-government funded study, Albanian small and medium-sized enterprises (SMEs) were severely hit by the outbreak of the global crisis in late 2008, suffering a decrease in demand, activity limitations, and lack of liquidity to higher extent than in other countries. Interviews conducted for this study with SME representatives across Albania showed around 38 percent of medium-sized businesses declared a drop in sales, lack of liquidity and limited financial access.
