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The survey of nearly 3,000 European companies reveals major trends for the year
Issy-les-Moulineaux, 11 January 2008
The 6th Eurofactor/Les Echos survey, conducted by CSA among 3,000 companies with six to 500 employees in seven European countries (Germany, Belgium, France, Spain, Italy, Portugal and Great Britain), suggests that business owners anticipate strong growth in Europe in 2008. However, in light of the many factors of uncertainty observed since the end of 2007, this growth will no doubt be somewhat slower than it was last year.
- A large majority of employers surveyed say they are fairly confident of their economic environment. In addition, their growing proportion in all countries except Spain is a result of an overall positive environment in 2007.
- For 2008, business owners appear to be optimistic, while remaining relatively cautious. The Eurofactor growth indicator(1) improved in five of the seven countries studied. The only notable decline is in Spain, where companies expect their economic and financial situation to worsen in 2008.
- By and large, the caution expressed by business owners stems from the growing number of risks affecting the overall environment since the second half of 2007 (financial crisis, oil prices, strong euro, etc.). Increases in raw material and energy prices are also cited as the chief causes for concern.
- European companies remain very susceptible to competition from emerging countries, with China and Eastern European countries posing the greatest threat. To stand up to this competition, European companies are looking to increase their productivity gains, among other things.
- Despite the financial crisis, business owners do not seem concerned about problems in terms of accessing credit over the coming months.
- Investment, the main contributor to the recovery in the euro zone since the middle of 2005, is likely to remain strong. In fact, most business owners plan to increase their investment spending or, at the very least, maintain it at already high levels. It appears, in particular, that while French companies lag behind their counterparts, German companies are the most apt to increase their investments.
(1) The Eurofactor growth indicator reflects the percentage of companies that expect a combination of growth in revenues, improvement in profitability and an increase in investment spending.