Results from the recent European Survey of Access to Finance of Small & Medium Business Enterprises (SMEs) conducted by Ipsos in February and March 2014 (on behalf of the European Central Bank) continues to show very diverse results when comparing the outlook of SMEs in different eurozone countries.
Overall, EU’s opinion of eurozone SMEs (businesses with up to 250 employees) is slightly negative about turnover, a -2% net percentage reporting that turnover had increased rather than decreased over the past six months. This is almost unchanged from the previous survey’s -3%.
In contrast, larger eurozone companies (250+ employees) reported an increase in turnover (+31 percentage points net increase, up from +20 percentage points in the previous survey).
Labour and other costs remain high but relatively stable over time, net percentages of 46% and 59% respectively reporting that these costs had increased over the past six months, compared with 43% and 60% for the previous survey period. Net opinion as to profits continues to be negative with -23% reporting a decline over the past six months, compared with -25% in the previous survey.
However, results for turnover and profits varied considerably by country.
• Since 2011, opinions of Irish SMEs about their turnover have continued to gradually improve in each survey.
• The Netherlands saw the biggest improvement from the previous survey with a net result of +13 percentage points for turnover, up from -8 percentage points in the previous survey.
Portugal and Greece have the worse turnover net results where -20 percentage points and -28 percentage points of SMEs respectively reported decreasing turnover over the last six months.
Views on profitability have improved the most in the Netherlands, the net percentage reporting an increase at +8 percentage points in the latest research compared with -13 percentage points previously.
Only German and Austrian SMEs also report increased profits, a net result of +4 percentage points in both countries.
Unfortunately, the profit situation is much worse for SMEs in Greece, Italy and Portugal, with -55, -54 and -38 percentage points respectively reporting declining profits. These results are worse than seen in the previous survey.
In view of the above results, it is not surprising that finding customers remained the leading concern overall for eurozone SMEs, with 24% mentioning this as their main problem, unchanged from the previous survey.
The cost of production or labour (15%) and access to finance (14%) also remained concerns. Access to finance is most likely to concern SMEs in Greece (42%) and Ireland (23%) and least worrying in Germany (6%), Austria (9%) and Finland (9%). Instead availability of skilled staff or experienced managers (14% average for eurozone SMEs) is a much more pressing problem for SME employers in Germany (30%), Austria (27%) and to a lesser degree Finland (18%).
Optimism about the general economic outlook of the country, as it effects the availability of external financing for eurozone SMEs, has gradually improved over the last four surveys rising to a net level of -12 percentage points (those who feel it has improved over the last six months less those who felt it has deteriorated).
Larger companies were much more favourable than SMEs about their countries’ economic outlook, rating it a net positive influence of +13 percentage points.
SMEs in Ireland were the most positive about the general economic outlook (+27%, up from -3% last survey), followed by Germany (+18%) and the Netherlands (+5%). While still negative overall, opinions have also improved since the previous survey in Spain (up from -31% last survey to -9%) and Italy (up from -37% to -26%). However, SMEs in Greece are more negative than in the previous survey (down from -29% to -35%) and the gloomy outlook remains unchanged over the last two surveys in France (up slightly from -46% to -45%).
In conclusion, the overall slightly negative views of eurozone SMEs about their financial situation continues to be based on widely divergent opinions across the various countries. Also, these opinions have shifted over the past 2-3 years from survey to survey, clearly steadily improving in Ireland, remaining consistently positive in Germany, but opinions of SMEs in Greece have further worsened and remain negative in France.
Methodology note:
1. Results for the EU SMEs are based on 7,520 telephone interviews conducted between 20th February and 24th March 2014. SME results (companies with fewer than 250 employees) are based on 6,969 interviews. See the full ECB report at:
https://www.ecb.europa.eu/stats/html/index.en.html
