European business confidence plummets to an all-time low

According to the latest Eurochambres business survey, business confidence in European companies is now even lower than both the financial crisis and the pandemic.

The survey of over 42,000 companies in 25 European countries found that companies see access to energy and raw materials as the biggest challenge of 2023.

Closely followed are two people-related concerns as companies grapple with the shortage of skilled labor and rising labor costs needed to attract and retain talent.

Many companies are now demanding joint EU efforts to combat high energy costs. They also aim to make long-term advances in improving overall energy efficiency and enabling access to renewable energy.

The companies also expect domestic sales to increase slightly in 2023, but at a slower pace than this year, while export sales are expected to fall sharply in the coming year due to supply chain challenges and spikes in commodity prices.

European companies are also planning an investment pause as they are unable to operate at the same volumes they had before the pandemic, weaker external demand and potential liquidity problems from the cost of borrowing. The focus should now be on cost-saving measures.

Sustainability requirements are seen as a minor issue for companies, ranking just above potential new Covid restrictions in the list of potential difficulties for next year.

“Ireland is well placed to address many of the issues affecting businesses across Europe and the data reflects that,” said Shane Conneely, Chambers Ireland’s Head of Policy.

“However, there are uncertainties about the strength of the domestic economy to maintain its momentum in 2023 and there are concerns that export trade will also fall.”

He pointed to a possible recession in the UK, which the Irish companies surveyed fear because of its feared impact on Irish production.

“Business as usual is not an option for our entrepreneurs, nor is it an option for our policy makers,” added Eurochambres President Luc Frieden.

“Massive investments in renewable energy and a competitive business environment are what companies in Europe need in these difficult times.” European business confidence plummets to an all-time low

Fry Electronics Team

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