Brussels, 26/11/2013 (Agence Europe) - Recent European Commission forecasts suggest that 2013 will see a turning point for economic growth, which will be confirmed in 2014.
After five years of uncertainty, the Commission says in a report published on 26 November that 2013 looks like being the first year since 2008 in which employment grew (by 0.3% on 2012) and also the first year of value-added (1%) for small businesses in Europe. The promising growth prospects are backed by positive signals, like the fact that increasing numbers of member states have seen job creation rising since 2010 and also rising profits for small businesses in their countries, or at least a slowing of decline.
The Commission praises small businesses for their sticking power in the unprecedented, complex and intense economic crisis. Last year, small businesses in the EU lost nearly 610,000 jobs (down 0.7% on 2011) and their share of GDP fell from €3.44 billion to €3.39 billion (down 1.3%). They did much better than big companies in the early days of the crisis (2008-2011), but have taken longer to recover as the crisis peters out.
The gap between the performance of small businesses and big companies has continued throughout the crisis and is due to weak domestic growth, which is particularly important for small businesses, and better export opportunities for big companies, explains the Commission. Domestic demand is likely to pick up to an extent in 2013 and 2014 and small businesses are, therefore, expected to achieve similar profit levels in terms of percentages to the big companies.
The Commission says that small businesses are crucial to the EU economy. The 20.4 million small businesses, most of them micro-businesses, employed 86.8 million people in Europe in 2012, 66.5% of the total workforce, and generated 57.6% of the non-financial trading economy (see EUROPE 10970).
The Commission stresses the role of measures taken under the small business act to alleviate the impact of the crisis and create a business-friendly environment for small businesses. Between 2010 and 2012, member states introduced 2,000 measures to back small business. On Tuesday, the Commission published fact files for each member state on progress in implementing the small business act. The measures to boost entrepreneurship and make civil services more responsive have been popular and have resulted in positive outcomes, but the Commission says that measures to give failed entrepreneurs a second chance are few and far between and among the least widespread of the ten areas set out in the SBA. (EH/transl.fl)