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Fri, Feb 10 2012
Low wages still give Bulgaria outsourcing edge, real estate consultancy says
The ample supply of vacant office space has kept rents low, analysts have said.
Photo: Красимир Юскеселиев
Bulgaria still offered the best location for Western European businesses looking to outsource in the midst of the economic crunch, according to a survey by global real estate services firm Jones Lang LaSalle. The country's main advantages were the lowest real estate and labour costs.
Countries in Central and Eastern Europe still offered the best value in challenging times, as opposed to their western neighbours, Bulgarian weekly Stroitelstvo Gradut quote the firm's analysts as saying.
Jones Lang LaSalle's survey, titled Onshore, Nearshore, Offshore: Unsure?, focused on the Czech Republic, Poland, Hungary and Romania, where the firm has offices. Bulgaria, however, offered one of the lowest office rent rates in Eastern Europe.
The stable economic and political systems, as well as European Union membership, were cited as competitive advantages. At the same time, however, Bulgaria had not adopted the euro yet and with an average labour cost of 2.09 euro an hour in 2007, projected to rise to 2.95 euro an hour in 2012, wages were among the lowest in Europe.
Jones Lang LaSelle reckons that business outsourcing and subsequent optimatisation of business services will be the primary propeller of demand augmentation in the region for the future, as companies will want to expand in invest in locations where they will want to cut down expenses and ensure growth.
Countries in Central and Eastern Europe still offered the best value in challenging times, as opposed to their western neighbours, Bulgarian weekly Stroitelstvo Gradut quote the firm's analysts as saying.
Jones Lang LaSalle's survey, titled Onshore, Nearshore, Offshore: Unsure?, focused on the Czech Republic, Poland, Hungary and Romania, where the firm has offices. Bulgaria, however, offered one of the lowest office rent rates in Eastern Europe.
The stable economic and political systems, as well as European Union membership, were cited as competitive advantages. At the same time, however, Bulgaria had not adopted the euro yet and with an average labour cost of 2.09 euro an hour in 2007, projected to rise to 2.95 euro an hour in 2012, wages were among the lowest in Europe.
Jones Lang LaSelle reckons that business outsourcing and subsequent optimatisation of business services will be the primary propeller of demand augmentation in the region for the future, as companies will want to expand in invest in locations where they will want to cut down expenses and ensure growth.
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Now I dont know who ex-pat is but sounds like he/she has had their fingers burnt and being somewhat bitter. Outsourced business here in Bulgaria going steady considering the current climate. 1/3 productivity? we have retained business and its growing...so please ex-pat dont gripe.
Incidentally not sure why the moderator removed the earlier comment? Reading some reent insulting comments on other subjects have been so much closer to the knuckle ;-(
I fully disagree with the article.
what is the benefit of outsourcing, when there are 1/3 of labor cost but in combination of 1/3 productivity. the net gain is ZERO. on top for outsourcing there are still huge administration cost. For BG I only see a economic perspective if they will lower labor costs (or evaluate BGN) or immediately (and efficiently) increase productivity !!!
I personally haven't seen low real estate costs. the rent are higher or equal to CE but with a astronomical worse quality (building and infrastructure!)
[...]
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The friction costs of doing business in Bulgaria are huge. Management can only be done in Stalinistic way, or you loose out. Include all the costs. This country is for tourism not production.
This comment has been removed by the moderator because it contained
Now Dianne that is really "over the top". We at 60K are one of the most dynamic and fastest growing business process (IT being our major customer base)and outsourcing companies in Bulgaria and the region, including (in stark contrast to your view) technical support! Happy Days!
Koos: You really have got to be having a laugh. IT outsourcing Bulgaria......Please
Three people I have now learnt to distrust with every ounce of my body, Bankers, Politicians and People in Real Estate. Each would sell their grandmother for money !
Bulgaria is still abgreat place to outsource your IT requirements to. koos@webfactory.bg http://www.webfactorybulgaria.com