The latest report of the UEAPME EU Craft and SME Barometer saw a slowly, but continuously rising SME Business Climate Index, which displays an average of the current situation and the SMEs expectations about the next economic period. In the first semester of 2018, it reached the highest level recorded since 2007 with 81.6 percentage points (up from 80.2 percentage points in the second half of 2017). This optimistic outlook by SMEs towards the current economic environment reflects the positive trend in domestic demand. Many hard economic indicators, such as the GDP growth rate and the unemployment rate, show significant improvements and are backed by a strong momentum in the global economy. “High domestic demand is the primary driver for the good economic performance of SMEs and their positive expectations. Although other factors such as an expansion in bank lending volumes and a boost in investment also contribute to the amelioration of the overall economic sentiment”, said UEAPME Economic Policy Director Gerhard Huemer during the presentation of the Barometer.
Additionally, the barometer surveyed high levels of confidence in the current and expected business situation above all measured sectors, due to the favorable economic conditions with stabile GDP growth and decreasing unemployment rates. However, the construction sector displayed recurring oscillations throughout the year 2017. A constant pattern is the reporting of a less positive business situation in the first semester of the year, especially for turnover, orders and employment. Nevertheless, certain parts of the construction sector are seasonal – fair whether in summertime boosts the sector and encourages client’ orders – which helps explaining the regular alternation of positive and negative results. Despite the positive results, the construction sector is still skeptical on future economic conditions, suffering from a lack of skills in the labour supply. EBC Secretary General Eugenio Quintieri stated: “The UEAPME EU SME Barometer is an important instrument to understand where our Construction SMEs stand and which expectations they have about their business environment. The latest UEAPME report shows that we are having very positive economic results, despite the fact that reaching pre-financial crisis levels in different countries is still a long-term goal. Finally, it also shows the specificity of the sector: very much labour-intensive, greatly relying on internal demand, and suffering from skills shortage“.
Background
The European Builders Confederation EBC is a member of UEAPME, notably chairing UEAPME Construction Forum held twice a year.
The EU Craft and SME Barometer builds on the results of surveys that are conducted by UEAPME member organisations twice a year on about 30.000 crafts and SMEs in different regions all over Europe.
At European level, it is able to provide data for size classes (micro, small and medium sized enterprises) and for four economic sectors (manufacturing, construction, business and personal services), which may show different developments over business cycles and may react differently to external effects.
This survey is published twice a year ahead of the European Councils in Spring and Autumn and includes UEAPME’s SME Business Climate Index, which is calculated as the average of the current situation and the expectations about the next period and sums positive and neutral answers as regards the overall situation for the business.
For more information on the latest EU Craft and SME Barometer, please click here.