Almost half of economic entities had low profitability rates

Nearly 50 percent of economic entities in all sectors of the economy, had profitability rates of less than five percent or operated at a loss in the first 11 months of 2013.

Of the 8,224 economic entities under review, 3,140 had profitability rates of less than five percent and more than 1000 were unprofitable.

The textile, garment and fishing industries had the largest shares of unprofitable organizations, between 30 and 40 percent. As many as 43.6 percent of the organizations in the agricultural sector and 35.3 percent of the organizations in the industrial sector had profitability rates of less than five percent.

The profitability of sales in January-November 2013 was seven percent, down from 10 percent in the first 11 months of 2012.

According to the economy ministry, companies became less efficient because of an output drop, a decrease in fixed costs resulting from the loss of economies of scale, and pay imbalances.

With salaries and wages rising at a faster pace than labor productivity, the first nine months of 2013 saw a growing share of companies’ funds go towards paying their staff, the ministry said. Companies spent 12.3 percent of their funds for paying salaries and wages between January and September, up from 9.6 percent in the same period of the previous year.