Making profits from the opening of a business is becoming increasingly difficult. Competition has increased, consumption has reduced due to high prices, and population decline due to emigration, although somewhat compensated by tourism.
Opening a bar in the neighborhood, once the preferred business of many Albanians, no longer rewards as much, as it involves competing with larger chains.
The same goes for small markets, which no longer have as much work as consumers are buying more from supermarket chains. Similarly, small clothing stores are feeling the pressure from large commercial centers.
Data from the Institute of Statistics (INSTAT) on income and profits show that the profit rate in the economy in 2022 was an average of 9.1%, with a slight decrease compared to 9.3% the previous year.
While trade businesses are not thriving as much, it seems that intellectual work is being rewarded. “Professional services” were the activity with the highest profit rate in 2022, at a rate of almost 33%. For every 100 lek of income, entities providing professional services earned 33 lek. Compared to the previous year, the profit rate increased by more than 8 percentage points.
The construction boom in recent years has increased work for those involved in real estate business. However, this sector has fallen to second place, from first in 2021. The profit rate was 24.7%, down from 32% the previous year.
Technological development has expanded opportunities for IT experts, who had a profit rate of 26% in 2022, with a slight increase compared to the previous year.
Although the rate of visiting healthcare clinics was lower in 2022 compared to 2020-2021 when their activity peaked due to the pandemic, “health and social work activities” still reported a profit rate of around 21%, down 3 percentage points from the previous year.
The recovery of consumption after the pandemic, as well as the arrival of foreign tourists, has boosted accommodation and food service activities, with rates of around 20% and 18% respectively in 2022, with a significant increase of 4-5 percentage points compared to the previous year. Travel agencies also saw a rate increase of around 2 percentage points, but their return remains lower, at around 8%.
Education is a business with a profit rate of 15%, with a slight decrease of one percentage point compared to the previous year.
Activities that earn less are those related to trade. According to INSTAT, if you engage in retail trade, you earn no more than 7.2 lek for every 100 lek invested, compared to 8.2 lek the previous year.
In wholesale trade, the profit rate was stable at 5.7%. However, due to the high turnover of this activity, the profits of wholesale trade are high.
The telecommunications sector, once one of the most profitable in the country, has resulted in losses of around 11 billion lek. The water supply activity also suffered losses, around 2 billion lek.
All businesses operating in the country generated total revenues of 3.5 trillion lek, or about 32 billion euros in 2022.
Of these, 316 billion lek, or nearly 3 billion euros, were profits. Wholesale trade generated the highest profits in value, at 18% of the total, followed by construction (11% of total profits) and professional services (10.6%).
