Downward Trend Continues, But Less Than Expected

10 October 2019
by smeunited -- last modified 10 October 2019

SMEunited President Ulrike Rabmer-Koller presents the latest EU SME Barometer results for Autumn 2019 as being above previous expectations.

SMEs report a more favourable outlook compared to last semester. The SME Climate Index for Autumn 2019 increased by 0.5 pts, reaching 77.1 points – an improvement, but still far from being a peak.

This can also be attributed to the fact that many events feared for by the end of 2018, such as Brexit and US-China trade conflicts, did not become a reality in the first semester of 2019. Additionally, the political and economic crises in France and Italy are fading out. However, the confidence of the countries most impacted by a Brexit is further diminishing.

On the positive side, SMEs benefit from increases in employment and wages, which still push internal demand in Europe. Finally, it seems that SMEs still are quite uncertain about the future in general, but less worried about the direct consequences on their own businesses.

"Our latest SME Barometer shows that SMEs in Europe were overly pessimistic concerning last semester and they have now started to hint a slightly more positive perspective," stated SMEunited President Ulrike Rabmer-Koller in her presentation of the SME Barometer for Autumn 2019. "However, they do not expect a turnaround in the current negative trend of the economy: their expectations for the overall situation are definitely on a downward trend, with a confidence drop of 4.6 compared to a year ago."
"Sectors depending on internal demand show a more stable development. This is especially the case for construction, where SMEs experienced a particularly positive semester. SMEs in this field are experiencing a quite good season due to the rise in internal demand, the low cost of mortgages and growing prices for housing.

"It is remarkable how the SMEs' outlook is more optimistic than the overall situation may suggest. Our figures show that while SMEs surely perceive the current political and economic environment as rather negative, their predictions for their own companies' future do not really match this view. Indeed, while the figure of overall expectations is down to 3.5, those for turnover and employment stay at 8.6 and 6.8 respectively. This means companies do not believe in a strong impact of this uncertainty on their businesses in the near future".

"In order to sustain the economic recovery and support SME growth the next generation of European programmes should focus on skills development, competitiveness and innovation, especially in the areas of digitalisation and circular economy. SMEs especially require the right tools to make the transformation. Further improvements are needed in the regulatory environment, and the new European Commission should focus more on level playing fields and fairness for all types and sizes of businesses."

SMEunited is the association of Crafts and SMEs in Europe with around 70 member organisations from over 30 European countries. SMEunited represents national cross-sectoral Craft and SME federations, European SME branch organisations and associate members. Combined, it represents more than 12 million enterprises with around 55 million employees across Europe. SMEunited is also a recognised employers' organisation and European Social Partner. SMEunited was formally known as UEAPME.

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