Business morale in SMEs in the European Union has not changed, except in the member states most directly concerned by the impact of Brexit, where it continues to plunge, according to the SME Business Climate Index measuring the business situation of SMEs and their confidence in the future, a poll published by the European Union for Craft and Small and Medium Enterprises (UEAPME) on Wednesday 18 October ahead of the Tripartite Social Summit.
‘The Climate Index for SMEs jumped up 80.2 pts, which is even above the pre-crisis period of 2007,’ explained Ulrike Rabmer-Koller, UEAPME president, to a group of reporters as a way of introducing the results. She rapidly went on to discuss the collapse in confidence in the Brexit group (the UK, Ireland and Denmark), where the index fell to 68.2 in the second quarter of 2017.
‘So the confidence of the Brexit group is only 68.2 and the gap of the average decrease is 12 points. This is the result of increased uncertainty about the outcome and the consequences of the Brexit negotiations, which turns SMEs in a ‘wait and see’ mode. And stop investing even if the impact of their current business is hardly very very big. It is very important to have a solution soon,’ she went on. In 2015, the index for the Brexit group was well above the European average, standing at 77.2 compared with 72.3 for EU enterprises. A close source tells us that Sweden and the Netherlands would also be affected.
In terms of the European Union, there has been a sharp rise in confidence since the second half of 2009, when the index fell to 55.1 points. There are wide geographical gaps, however. Using the study’s classifications, the index for member states in the north and centre (Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Romania, Slovakia, Sweden and Romania), stands at 82.1 percentage points, while that of the member states in the south and periphery (Croatia, Cyprus, Greece, Ireland, Italy, Malta, Portugal, Slovenia and Spain) stands at 75.5%. ‘This is mainly due to the situation of Greece, which has not really recovered yet, and by Italy, where the needed reforms are still not implemented,’ commented the UAPME head.
Another graph, another trend. Within the eurozone, the index stood at 83.1 in the second quarter of 2017, compared with 73.5 outside the eurozone. An inversion compared with recently, when non-eurozone member states were more optimistic, particularly in the first half of 2015, when their confidence stood at 75.1 points compared to the eurozone’s 72.3.
Broadly, SME morale is slightly higher than in bid companies, where the 'Market SME' and 'EC ESI' indexes stand at 79.4 points and 77.8 points. (Original version in French by Pascal Hansens)