Belgium, (Brussels Morning Newspaper) The energy crisis and war in Ukraine have combined to seriously dent hopes of an economic recovery in Europe,says the SME Business Climate Index.
Even if the results for the last semester are significantly above expectations, the survey reports a 2.8% decline in SMEs’ confidence for the future.
Speaking on Friday, Petri Salminen, SMEunited president, said, ”Worrying economic circumstances such as rising energy prices, supply chain disruptions and inflationary pressures were the main reasons for the worsening business confidence.”
He added, “SMEs with a strong presence in the construction sector have been further hit by high-interest rates on mortgages,” said Petri Salminen, SMEunited President.
The findings of the latest SME Barometer, developed by the SMEunited Study Unit, were presented by Gerhard Huemer.
According to Huemer, for SMEs to navigate the high uncertainty related to the Ukrainian war, the focus of national and European policies should be on stabilising energy and commodity markets and taking urgent action to mitigate energy price hicks.
This is a prerequisite for investments and reforms to accelerate the green and digital transition, he said.
Huemer, SMEunited Economic Policy Director, said results for the first semester of 2022 exceeded expectations, as fears of an outbreak of Covid variants did not materialise.
However, investment results were worse than expected because of uncertainty about the future business environment.
He said the current semester shows sharp increasing uncertainty. Negative expectations about turnover and orders lead to a strong drop in the value for investment (-16.7). At the same time, employment expectations remain positive (+1.2), indicating that many SMEs still want to fill existing vacancies.
The unstable economic context caused by the impact of the war in Ukraine, rising energy prices, supply chain disruptions and inflationary pressures are the main reasons for the worsening business confidence.
In particular, SMEs with a strong presence in the construction sector are hit by high interest rates on mortgages.
Expectations about investments are worse than expected because of uncertainty regarding the future business environment.
A spokesman for SMEunited said, “To allow SMEs to face the high uncertainty related to the Ukrainian war, the focus of national and European policies should be on stabilising energy and commodity markets and taking urgent action to mitigate energy price hicks. This is a prerequisite for investments and reforms to accelerate the green and digital transition.”
