Large companies more sensitive to economic situation than small and medium-sized businesses

Large companies are much more sensitive to the economic situation than medium-sized and small businesses (MKB). By the end of 2009 – in the midst of the economic crisis – sales of large companies and MKB businesses had dropped by nearly 70 and 56 percent respectively relative to one year previously.

Exports reduced

Large companies more often operate internationally and exports constitute an important part of their activities. Last year’s economic downturn was mainly due to the reduced demand for products and services from other countries. The manufacturing industry suffered most. Nearly 90 percent of large manufacturing companies suffered loss of turnover in the third quarter of 2009, as against 62 percent of small and medium-sized companies.

Booming economy

The effects of the economic boom in 2006 and 2007 were more obvious in large companies than in MKB businesses. In the sector business services, for example, nearly 80 percent of businesses achieved better turnover results in the first quarter of 2007, as opposed to 56 percent of medium-sized and small businesses.

Large temp agencies supply staff on a temporary basis, often to economically sensitive sectors like manufacturing industry. Temp agencies, architectural and engineering firms and the IT sector are most prone to economic ups and downs.

Higher and lower turnover

Economic recovery

During 2010, the share of companies improving their sales has increased. This applies to large, internationally operating companies as well as small and medium-sized businesses. The construction sector as yet shows no signs of recovery. The proportion of companies facing loss of turnover is still 60 percent in 2010. For large companies active in the sector hotels and restaurants, there is an obvious change for the better. Over the past three quarters, the proportion of companies facing turnover loss dropped from 70 to 20 percent.

Share in employment and added value, 2008

Share added value

The bulk of businesses active in the Netherlands fall into the categories medium-sized and small. The share of MKB businesses in employment is nearly 70 percent and MKB businesses accounted for 60 percent of the value added in 2008. In many sectors, MKB businesses account for more than three quarters of employment and value added. In the sectors manufacturing industry and transport, employment and value added generated by large companies and MKB businesses is about the same. 

Share MKB versus large companies, 2008

Ralph Wijnen and Lico Hoekema